The Real Costs of Long-Term Care, Ep #274

You’ve likely heard the oft-cited statistic: 70% of people turning 65 will need long-term care. While this number is technically accurate, it wildly overstates the financial risk. The broad 70% figure counts any functional limitation—such as a daughter driving you to an appointment for a few months—as “care.”

A more meaningful statistic comes from Health and Human Services, which uses a stricter definition: needing help with at least two activities of daily living or supervision due to serious cognitive impairment, expected to last longer than 90 days. By this standard, 56% of Americans turning 65 will require long-term care. Nearly half will never face a significant care need, while about one in five will need care for more than five years—a potential financial catastrophe.

Women face higher odds and longer durations of care, with 64% of women versus 49% of men developing a significant care need. Reasons include longer life expectancies and, for married couples, the pattern that the husband often receives care from his wife, while in widowhood, she must pay for professional or facility care.

The Real Costs: Assisted Living, Nursing Homes, and Home Care

The latest CareScout Cost of Care Survey puts hard numbers to what families face in 2025:

• In-home caregiving: $35/hour. At the typical 44 hours per week, that’s $80,000/year—and not even round-the-clock.

• Assisted living: Median costs are $6,200/month, or $74,400/year.

• Nursing home: $315/day for a semi-private room (about $115,000/year), with private rooms running closer to $130,000/year.

The financial impact becomes clearer when you factor in duration. Assisted living at $74,000/year over 3.6 years (average for women) can easily surpass $270,000 before inflation. For the unlucky one in five who need care for five+ years, a lifetime’s savings can be wiped away.

Who Pays? The Great Medicare Myth

A stunning misconception is that Medicare will handle these costs. It won’t—Medicare covers only short-term skilled care or rehab after a hospital stay, with strict caps. Custodial care, including help with bathing, dressing, eating, and other typical long-term care needs, is excluded.

So who covers the bills?

• You (out-of-pocket): This is the default for middle- and upper-middle-income families, planned or not.

• Insurance: While long-term care insurance exists, it’s gotten pricier and harder to qualify for. Evaluation should happen in your 50s or early 60s, not your 70s.

• Family members: Often, a spouse or adult child becomes the caregiver. 63 million Americans act as caregivers, supplying care valued at over $1 trillion annually.

• Medicaid: This is a safety net only after assets have been nearly exhausted. The spouse at home (the “community spouse”) may retain some assets and the house, but this is far from an ideal retirement.

The Power of Early Action

Financial costs are only half the story. The first caregiver is usually a spouse, not a paid professional. Caregiving can rapidly erode the health, finances, and social connections of the caregiver, often leaving the surviving spouse depleted and isolated just as they face their own aging alone.

Long-term care risk isn’t a remote possibility; it’s a central, knowable part of retirement planning. Every tool for managing it works better if you start before a crisis hits. Take the first step right now: look up care costs in your area, show them to your spouse, and start the conversation. Early planning isn’t just about saving money—it’s about protecting the person you love most from added hardship when they can least afford it.

Outline of This Episode

• [00:00] Long-term care costs explained
• [05:15] Women at higher long-term care risk
• [09:06] Understanding Medicare and long-term care costs
• [12:33] Discussing caregiver options
• [15:05] Challenges of caregiving in retirement
• [17:54] Planning for long-term care costs
• [18:46] Your five action steps to plan for long-term care
• [20:34] Discussing future caregiving plans

Resources Mentioned

• U.S. Department of Health and Human Services, ASPE — Long-Term Services and Supports for Older Americans: Risks and Financing, 2022. https://aspe.hhs.gov 
• HHS/ASPE — What Is the Lifetime Risk of Needing and Receiving Long-Term Services and Supports? https://aspe.hhs.gov 
• CareScout (formerly Genworth) — 2025 Cost of Care Survey. https://www.carescout.com/cost-of-care 
• AARP and National Alliance for Caregiving — Caregiving in the U.S. 2025. https://www.aarp.org/pri/topics/ltss/family-caregiving/caregiving-in-the-us-2025/ 
• AARP Public Policy Institute — Valuing the Invaluable 2026. https://www.aarp.org/pri/topics/ltss/family-caregiving/valuing-the-invaluable-2026-update/ 
• Medicaid.gov — Spousal Impoverishment standards, 2026. https://www.medicaid.gov/medicaid/eligibility-policy/spousal-impoverishment 
• Medicare.gov — skilled nursing facility coverage limits. https://www.medicare.gov 

Connect With Scott Wellens

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About the author, Scott Wellens

Scott Wellens, CFP® is an investment advisor and founder of Fortress Planning Group. After earning his Bachelor of Science degree from the University of Wisconsin-Oshkosh, Scott quickly ascended to become a Vice President of North American Sales at a major regional provider of telecommunications infrastructure. While financially successful in this role, Scott searched for ways to pursue his passion related to financial literacy and providing financial freedom for both his own family and others. During his search, Scott became curious about the significant gap he found in the financial services sector: he was unable to find a comprehensive financial planner that maintained a family stewardship lens without being attached to financial products. Scott decided to fill that gap by creating his own planning firm that maintains a strong passion for comprehensive, unbiased wealth planning that is genuinely client-centered.

Scott resides in Menomonee Falls, WI with his family. He is the father of three active and independent daughters who keep him on his toes. Scott is an active community member, serving on the Hamilton Education Foundation Board, serves as a Dave Ramsey Financial Peace facilitator and leads the All Pro Dad’s group at their local elementary school. Scott enjoys spending his free time visiting state parks with his family, reading, and watching the Milwaukee Bucks and the Green Bay Packers win ball games.

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