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:

ScenarioMonthlyTotal (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

Care costs are approximate reference averages by state tier, not local quotes. Not financial advice.