Paul Simmons, CFA, CFP® 
Senior Analyst, Client Needs Research

Health care is one of the biggest expenses in retirement. Medicare may cover a large part of traditional medical expenses, but it generally doesn’t cover expenses related to long-term care, which can be substantial. That’s why it is important to plan for long-term care costs before you’ll need them.

Planning tip
While it’s never too late, it's ideal to begin planning for long-term care expenses between ages 50 and 60.

When to start planning for a long-term care need

It’s earlier than you may think! While long-term care services are typically needed later in life, it’s beneficial to start planning between the ages of 50 and 60. This is especially important if you decide insurance is an appropriate solution, because:

  • Your health may be better, increasing the likelihood that coverage can be obtained and that premiums are lower.
  • Being younger gives you more time to spread out the premiums, which also makes them lower.
  • You may still be working and better able to afford the premiums.

Planning early also gives you more time to discuss your care and aging preferences with your loved ones. The more proactive you are, the more options you may have and the more confident you can be that your wishes will be met.

What to consider for your care preferences

Long-term care services are broad, ranging from help with day-to-day tasks such as cleaning to more substantial supervision required for one’s health and safety. When thinking about how you’d prefer to receive care, consider what you may want and need with respect to the:

  • Place of care. The majority of care starts in one’s own home — whether out of preference or necessity ( It may also take place in facilities like rehabilitation centers, adult day cares, assisted living facilities and nursing homes. Costs vary substantially based on where care is received, as shown in the chart below.
  • Providers of care. The majority of care is provided by informal caregivers — family and friends (SCAN Foundation). While this may be sufficient for a period of time, informal caregiving can carry significant trade-offs for the caregiver as well as the person who needs care. Paid caregivers range from personal care and home health aides to nursing and skilled care providers.
 Annual cost of long-term care options - 2021

The annual costs of long-term care options vary. Care in an assisted living facility costs $54,000; home health aide services (assuming 44 hours per week) costs $62,000; a semi-private room in a nursing home runs $95,000; a private room in a nursing home costs $108,000.

Source: Genworth 2021 Cost of Care Survey. Median values, rounded to the nearest thousand.

Next steps

Once you have a sense of how you’d want to receive long-term care and how much it may cost, you’ll want to discuss the options for covering those costs. That could include self-insurance, purchasing insurance, or a combination of those two solutions. Working with a financial advisor can help you determine which long-term care insurance plan is most appropriate for you.