Transparent method
The formula
Worked example
Example inputs
How to interpret the result
Long-term care costs vary enormously by geography and by the specific type of care needed, so a projection built on national averages can miss local reality by a wide margin. The same projected first-year cost can be a significant underestimate in a high-cost region and an overestimate in a lower-cost one.
Before you rely on it
What to check
Replace any default cost assumption with actual local care costs for the specific type of care being planned for, since geography moves this figure substantially.
The common error
Where people go wrong with long-term care cost calculator
Projecting long-term care costs using a national average rather than actual local rates. Regional cost differences for the same type of care can be large enough to meaningfully change the resulting savings target.
Sensitivity evidence
How current monthly care cost changes the projected first-year care cost
| Current monthly care cost | Projected first-year care cost | Projected total care cost | Current annual care cost |
|---|---|---|---|
| $6,000 | $129,668 | $404,771 | $72,000 |
| $6,750 | $145,876 | $455,368 | $81,000 |
| $7,500worked example | $162,085 | $505,964 | $90,000 |
| $8,250 | $178,293 | $556,561 | $99,000 |
| $9,000 | $194,502 | $607,157 | $108,000 |
Every input, tested
Which input moves the projected first-year care cost most
| Input | Tested from | To | Projected first-year care cost at each end | Swing |
|---|---|---|---|---|
| Years until care begins | 11.0 years | 19.0 years | $138,551 to $189,616 | $51,066 (32%) |
| Annual care-cost inflation | 3.0% | 5.0% | $140,217 to $187,104 | $46,886 (29%) |
| Current monthly care cost | $6,750 | $8,250 | $145,876 to $178,293 | $32,417 (20%) |
| Years of care | 2.0 years | 4.0 years | $162,085 to $162,085 | none |
Two variables at once
Projected first-year care cost by current monthly care cost and annual care-cost inflation
| Current monthly care cost \ Annual care-cost inflation | 2.0% | 4.0% | 6.0% |
|---|---|---|---|
| $6,000 | $96,903 | $129,668 | $172,552 |
| $6,750 | $109,015 | $145,876 | $194,121 |
| $7,500 | $121,128 | $162,085 | $215,690 |
| $8,250 | $133,241 | $178,293 | $237,259 |
| $9,000 | $145,354 | $194,502 | $258,828 |
Step by step
The worked example, input by input
| Input | Value used |
|---|---|
| Current monthly care cost | $7,500 |
| Annual care-cost inflation | 4.0% |
| Years until care begins | 15.0 years |
| Years of care | 3.0 years |
| Projected first-year care cost | $162,085 |
| Projected total care cost | $505,964 |
| Current annual care cost | $90,000 |
Where the inputs come from
Current monthly care cost is the price today of the level of care you are planning for, such as a nursing home room, assisted living or in-home help, and it varies widely by state, so use local figures from a cost survey or from facilities near you. Annual care-cost inflation is your assumption for how fast prices rise, years until care begins is the wait, and years of care is how long you expect to need it. Many people need care for two to three years on average.
Using the projected first-year care cost in a real decision
Decide before you need care, since premiums rise with age and health.
When the result stops applying
The estimate uses one level of care and one price, while needs change over time, from home help to a facility. Medicare covers only limited short-term skilled care, and Medicaid pays only after assets are largely spent, with rules that vary by state. A spouse's care needs can be as costly as your own. Costs vary greatly by region.
What to compare it with
Add this to the retirement healthcare cost calculator for a complete health budget, and see the retirement income gap page for the impact. The retirement goal calculator shows the portfolio needed. Compare quotes for long-term care insurance and hybrid policies while you are healthy.
People also ask
Frequently asked questions
Does Medicare pay for long-term care?
Not for ongoing custodial care. Medicare covers limited skilled nursing after a hospital stay, but most long-term care must be paid from savings, insurance or Medicaid.
How long do people need long-term care?
The average is around two to three years, but many need none and some need care for much longer, which makes it a hard cost to predict.
Should I buy long-term care insurance?
It depends on your assets and health. It is most useful for people with enough to lose but not enough to self-insure, and it is cheaper to buy in your fifties or early sixties.