How much should I save for long-term care?

The CareScout Cost of Care Survey 2025 (previously published as the Genworth Cost of Care Survey, drawing on 4,425 completed nursing home surveys) put the national medians at $10,798 a month for a private nursing home room, $9,581 for a semi-private room and $6,200 for an assisted living community. A non-medical caregiver at home cost $35 an hour, and adult day health care $95 a day.

Annualized, a private room is $129,575 a year and assisted living is $74,400. Staying at home is only cheaper at part-time hours: 44 hours a week at $35 comes to $80,080 a year, more than assisted living.

These are national medians. The same room can cost far more or far less depending on the state, so a plan built on the local figure is more accurate than one built on the national one. The full breakdown sits on our long-term care cost statistics page.

Probability. HHS (LongTermCare.gov) estimates that someone turning 65 today has almost a 70% chance of needing some long-term care. Most of that care happens at home: 65% of people use some home care, and 59% receive unpaid care only.

Duration. The average is about three years, but averages hide the shape. One-third may never need care, while 20% need it for longer than five years. Women need care longer than men, 3.7 years against 2.2, so a single woman typically plans for a longer episode than a single man.

Setting. Part-time help at home, assisted living and a nursing home are three very different price points. Planning for one setting and ending up in another is the most common way a reserve falls short.

Who else pays. Medicare covers rehabilitation, not custodial care. Medicaid pays for long-term care only after assets are spent down to a state threshold. Family members provide a large share of care for free, which shows up as lost earnings on the unpaid caregiving side rather than as a bill.

The table prices common scenarios at the CareScout 2025 national medians, in today's dollars, before any inflation. It is the clearest way to pick a target, because it turns an abstract risk into a specific episode you are choosing to fund.

The $150,000 to $400,000 range covers the middle four rows. Below it, a reserve handles part-time help and short stays. Above it, the long tail is where self-funding becomes impractical for most households and insurance or the Medicaid path takes over.

Take a 55-year-old who wants to self-fund about $200,000 of care in today's dollars, roughly two to three years of assisted living or full-time home care, and assumes the need would arrive around 85.

Step 1, inflate the target. In the 2025 survey, nursing home, assisted living and home care costs rose between 1% and 5% from 2024. Assuming 3% a year for 30 years: $200,000 x 1.03^30 = $200,000 x 2.427 = about $485,000 in future dollars.

Step 2, find the monthly saving. Assuming a 6% annual return, compounded monthly (0.5% a month) over 360 months, each $1 saved monthly grows to about $1,004.50. So $485,000 / $1,004.50 = about $483 a month.

Step 3, check the alternative. If this person already has $100,000 earmarked inside a larger portfolio, that sum at the same 6% would grow to about $574,000 in 30 years ($100,000 x 1.06^30 = $100,000 x 5.74), covering the target with nothing added. Existing assets often do more of the work than new saving.

Both the return and the inflation rate are assumptions, not forecasts. A lower return or faster care inflation raises the monthly figure, which is why the target is worth recalculating every few years.

Same target ($200,000 in today's dollars, needed at 85), same assumptions (3% care inflation, 6% annual return compounded monthly).

The pattern is the familiar one from compound interest: starting at 35 costs less than a third of starting at 65 each month, even though the future-dollar target is larger. Many people do not save for long-term care in a separate pot; they earmark part of their retirement portfolio, and the figures above show how much extra that portfolio has to carry.

Who pays today. Of the $219.9 billion spent on nursing care facilities in 2024, Medicaid paid 35.9%, households paid 22.1% out of pocket, Medicare paid 21.5% and private health insurance only 8.8% (CMS National Health Expenditure Accounts 2024).

Medicare. Skilled nursing facility coverage requires a qualifying hospital stay and covers rehabilitation, not custodial help with daily activities. Days 1 to 20 are covered, days 21 to 100 carry a coinsurance of $217 a day in 2026 (CMS), and after day 100 Medicare pays nothing.

Insurance. A long-term care policy, or a hybrid life and long-term care policy, transfers the tail risk that savings struggle with. The IRS treats part of the premium as a medical expense, capped by age for 2026 at $500 (40 or under), $930 (41 to 50), $1,860 (51 to 60), $4,960 (61 to 70) and $6,200 (over 70), per Rev. Proc. 2025-32. Per diem benefits from a qualified contract are tax-free up to $430 a day in 2026.

Medicaid. It becomes available after assets are spent down to a low, state-specific threshold. For many households the realistic plan is to self-fund for a period and rely on Medicaid if care runs long, with special rules protecting a spouse who stays at home.

The HSA. A health savings account can pay for qualified long-term care services and qualified long-term care insurance premiums up to the same age limits, tax-free. An HSA invested and left untouched for decades is a common place to hold part of a care reserve.

Walnut is an AI investing app that reads your real portfolio. It does not sell insurance, and it does not move money from your bank. Here is what it can do for a long-term care reserve.

1. Connect your brokerage

Link your account read-only. Walnut syncs your holdings and shows how your portfolio has done against the S&P 500, which is the starting point for deciding how much of it could be earmarked for care.

2. Set a goal for the reserve

Create a goal with the target from the tables above and a date. Walnut projects whether you are on track at your current pace, so a shortfall shows up decades early rather than at a discharge meeting.

3. Build a basket with target weights

A basket is a set of holdings with the weights you choose, for example a broad index fund and a bond fund mix for money you will not touch for 20 years. Walnut tracks it against the S&P 500 and shows how far it has moved from your targets.

4. Add a recurring investment

A recurring investment spends a fixed amount into the basket on a schedule, using cash that is already in your brokerage account. If the cash is not there on the day, the run is skipped and you are told.

5. Ask the assistant

The assistant can answer questions like "how many years of assisted living would my portfolio cover at $74,400 a year?" using your actual holdings. It explains; the decision stays with you.

Singles usually plan for paid care, because there is often no spouse at home to provide it. A single woman also faces the longer average need in the HHS figures, 3.7 years, which points toward the upper half of the range.

Couples face two separate risks, not one shared one. The first partner to need care often receives it at home from the other, unpaid; the second is more likely to need paid care. Planning a reserve per person, rather than one pot for both, reflects that sequence.

The house is the largest asset for many retirees and works as an implicit care reserve once the person needing care moves out and it can be sold. Where it will be sold, the savings target can sit lower, as long as that assumption is written down rather than left implicit.

Assuming Medicare covers it. It covers up to 100 days of skilled rehabilitation, not years of custodial care.

Planning on the national median. Local prices vary widely by state. The national figure is a starting point, not a budget.

Ignoring inflation. A $200,000 target at 3% care inflation is about $485,000 in 30 years. Saving the nominal figure leaves a reserve that buys less than half of what was intended.

Counting the house twice. Home equity is a real funding source when the person needing care moves out. It is not available when a spouse still lives there.

Waiting to look at insurance. Premiums rise with age and coverage can become unavailable after a diagnosis, so the window to transfer the risk narrows over time.

Holding the whole reserve in cash for decades. Money that may not be needed for 20 or 30 years has time to be invested, and the worked example depends on it.

Cost figures: CareScout Cost of Care Survey 2025. Probability and duration: HHS Administration for Community Living, LongTermCare.gov. Payer shares: CMS National Health Expenditure Accounts 2024. Medicare skilled nursing coinsurance: CMS, 2026 Medicare Parts A and B premiums and deductibles. Premium deduction limits and per diem limit: IRS Rev. Proc. 2025-32, sections 4.27 and 4.62. For the wider retirement picture, see how much you need to retire at 65 and our healthcare cost in retirement statistics. Walnut is informational and is not an investment adviser. This guide is educational and not personalized financial advice.