How Long-Term Care Costs Could Wreck Your Retirement Plan (And How to Prepare)

Most retirement calculators assume you'll spend a steady amount every year until you die. In reality, roughly 7 out of 10 people who turn 65 will need some form of long-term care in their lifetime — and the cost of that care can blow through decades of careful saving in just a few years. Here's what it actually costs, and how to build it into your number before it becomes an emergency.

What Long-Term Care Actually Costs in 2026

These are national medians — your state can run significantly higher or lower, but they give you a realistic starting point:

Type of Care	Monthly	Annual
Assisted living	~$6,200	~$74,400
Nursing home, semi-private room	~$9,581	~$114,975
Nursing home, private room	~$10,798	~$129,576

On average, someone turning 65 today will need about 3 years of paid care over their lifetime — women closer to 3.7 years, men closer to 2.2 years. At a nursing home's median cost, that's easily $300,000–$400,000, and it's rising roughly 3% a year on top of whatever else inflation is doing to your retirement budget.

The Part Most People Get Wrong: Medicare Doesn't Cover This

Medicare covers up to 100 days of skilled nursing care after a qualifying hospital stay — and even then, you pay the Part A deductible ($1,736 in 2026) plus a daily copay of $217 starting on day 21. After 100 days, Medicare coverage stops completely. Custodial care — help with bathing, dressing, eating, the day-to-day support most long-term care actually is — isn't covered by Medicare at all, at any point.

So Who Pays For It?

• Out of pocket — savings, investments, and retirement account withdrawals, until the money runs out
• Long-term care insurance — a dedicated policy purchased in advance (see our long-term care insurance guide for how these policies work)
• Medicaid — but only after you've spent down to your state's asset limit (commonly around $2,000 in countable assets, with a monthly income limit near $2,982 in 2026), and only after a 5-year "look-back" period on asset transfers

That 5-year look-back is the detail that catches families off guard: giving away or transferring assets to qualify for Medicaid sooner doesn't work if it happened within the last 5 years — the state can penalize you with a delayed eligibility period based on what was transferred.

Building It Into Your Retirement Number

If you've already worked out how much you need to retire, long-term care is the biggest wildcard that number probably doesn't account for. A few practical ways to handle it:

• Add a buffer, not a guess. Rather than trying to predict exact costs decades out, many planners suggest padding your retirement number by roughly one to three years of your local nursing home cost as a standalone reserve — separate from your regular spending withdrawals.
• Decide early whether insurance makes sense for you. Long-term care insurance is generally only available while you're healthy — most insurers won't issue a policy once care is already needed, and pricing is lowest in your 50s.
• Know which accounts you'd tap first. A large, unplanned care expense is exactly the kind of thing that can force a poorly timed withdrawal from a retirement account and land you in a much higher tax bracket for that year.

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Bottom Line

Long-term care isn't a small risk you can ignore — most people will face it, and the cost is large enough to derail an otherwise well-funded retirement. The earlier you decide how you'd cover it, whether through insurance, dedicated savings, or a clear withdrawal strategy, the more options you'll actually have when the time comes.

Related reading: What Is Long-Term Care Insurance and Do You Need It? · How Much Do You Need to Retire? A Simple Way to Find Your Number · What Order Should You Withdraw From Your Retirement Accounts?