Lifestyle
The cost of eldercare
Long-term care is the expense most retirement plans underestimate. And Medicare doesn't cover it. Here's what it runs, by type and state.
Long-term care is the biggest gap in most retirement plans, because people assume Medicare covers it. It doesn't cover custodial care, help with daily living, which is what most eldercare is. This projects the cost by care type and state cost tier over the years it's needed, so the number is concrete rather than a vague worry.
CA/NY/NJ are very high; MS/AL/AR are low.
Pick the type of care and how long it's needed.
Worked example
Four years of assisted living in a medium-cost state, versus a nursing home in a very-high-cost state:
| Scenario | Monthly | Total (4 years) |
|---|---|---|
| Assisted living, medium-cost state | $4,320 | $220,137 |
| Nursing home, very-high-cost state | $13,200 | $672,640 |
Four years of assisted living runs about $220,137; a nursing home in an expensive state can be $672,640. These are the numbers that drain a lifetime of savings in a few years, and why long-term-care insurance and Medicaid planning exist.
Questions
Doesn't Medicare pay for this?
No. Medicare covers short rehab stays after a hospitalization, not ongoing custodial care, the help with bathing, dressing and meals that makes up most long-term care. That cost falls on savings, insurance, or Medicaid.
When does Medicaid step in?
Medicaid covers long-term care, but only after you've spent down assets to a low threshold. That's why families plan years ahead, asset transfers have a five-year look-back, so last-minute moves don't work.
How accurate are these figures?
They're reference US averages by care type, scaled to a broad state cost tier and inflated 4%/year. Real quotes vary widely by facility and city, treat this as a planning range, then get local quotes.
Related tools
- When can I retire? build the care cost into the plan
- Net worth what's available to fund it
- Death & money what's left afterward
Care costs are approximate reference averages by state tier, not local quotes. Not financial advice.