Intro
Hearing about the high costs of long-term care might make you want to bury your head in the sand—just like our ostrich friend above.
In much the same way, ignoring long-term care costs won’t make them go away. With limited government assistance, many families end up paying out-of-pocket for home care, assisted living, or nursing homes.
You’ve already saved for your home and your kids’ education. Now long-term care?
The good news? You’re already ahead of the game by educating yourself now.
Use the same acronym we use for long-term care (LTC) as a reminder to Learn about options, Talk with family, and Create a plan. Understanding the costs is the first step in all three.
Post jargon
assisted living: a type of residential care that assists with ADLs
home care: LTC provided at home
inflation: the rise in the cost of goods and services
inflation protection: LTCi benefit that adjusts for rising costs
LTC: long-term care
LTCi: long-term care insurance
nursing home: like a hospital, but with fewer doctors and for LTC
➡️ Explore all the LTC jargon
Current costs
As a heads up, you're about to see some big numbers.
The current national averages are:
- nursing home: $117k/year
- home care: $76k/year (44 hrs/week)
- memory care: $74k/year
- assisted living: $64k/year
Costs vary significantly by region, so use this cost calculator to learn about your area's current and estimated future costs.
For example, the average cost of assisted living in Denver, Colorado, in 2043 is estimated to be $108k/year if costs rise 3% annually.
Some notes on this calculator:
- Memory care isn't included, but the annual cost is usually a little less than nursing homes.
- Costs vary widely from state to state, often due to supply and demand. For example, a private room in a nursing home varies from $71k (Missouri) to $182k (Connecticut).
- You can adjust the number of in-home care hours at the bottom of the calculator:
Break time
If these numbers feel disheartening, pause for a minute to take a deep breath.
Inflation rates
OK, so you know current LTC costs with a high degree of accuracy. How can you predict future costs? And, for that matter, future sports scores?
To predict future sports scores, ask Biff.
To predict future LTC costs, start with a graph of historical LTC costs.
Costs have risen steadily, but it helps to put this inflation in context—they've increased at a rate similar to household staples like eggs over the last few decades.
| Last 3 years | Last 19 years | |
|---|---|---|
| Home health aide (in-home LTC) | 11.2% | 3.1% |
| Assisted living facility | 7.6% | 4.3% |
| Nursing home (private room) | 3.3% | 3.1% |
| Eggs | 19.3% | 4.0% |
Wrap up
Long-term care costs are high, but by planning ahead, you can manage them and avoid unwelcome surprises. Just as an ostrich doesn’t really bury its head to avoid a lion, you don’t need to ignore the financial challenges of long-term care. Calculating costs and understanding insurance can help you prepare so that when the time comes, you’ll be ready.
