The Retirement Cost Few Americans Plan For
Long-term care is one of the largest potential expenses in retirement. Understanding the likelihood of needing care, what it may cost, and how those expenses can affect retirement savings is an important part of preparing for the future.
For many Americans, retirement planning focuses on a familiar list of financial goals:
Saving enough money.
Paying off debt.
Maximizing Social Security benefits.
Managing investments.
But one of the largest potential expenses in retirement is often one of the least discussed:
The cost of needing care later in life.
Long-term care can include assistance with daily activities such as bathing, dressing, eating, or managing medications. It may take place at home, in an assisted living community, or in a nursing facility.
The challenge is that many retirees underestimate both the likelihood of needing care and the potential cost.
According to the Administration for Community Living, someone turning age 65 today has nearly a 70% chance of needing some type of long-term care services and supports during their lifetime.
For retirees and families, understanding this risk is an important part of preparing for the years ahead.
The Cost of Care Can Be Significant
Long-term care costs vary widely depending on location, type of care, and level of assistance needed.
National median costs have continued to rise.
According to CareScout’s 2025 Cost of Care Survey:
- Non-medical caregiver services reached approximately $35 per hour nationally.
- Assisted living costs reached approximately $6,200 per month, or $74,400 annually.
- A private nursing home room reached approximately $10,798 per month, or $129,575 annually.
- A semi-private nursing home room reached approximately $9,581 per month, or $114,975 annually.
These expenses can create a significant challenge because retirement income is often built around predictable monthly expenses—not the possibility of several thousand dollars per month in additional care costs.
Why Many Retirees Are Surprised by Long-Term Care Costs
One reason long-term care creates financial stress is that many people assume Medicare will cover most healthcare expenses during retirement.
Medicare does cover certain medical services and limited skilled care under specific circumstances, but it generally does not cover ongoing custodial care—the type of assistance many people need with daily activities over extended periods.
This distinction can create confusion.
A hospital stay, rehabilitation after an illness, and long-term assistance with daily living are different types of care with different coverage rules.
Understanding that difference before care is needed can help families avoid difficult financial surprises.
Care Needs Are Not Limited to Nursing Homes
Long-term care is often associated with nursing facilities, but many people receive care in other settings.
The Administration for Community Living reports that more people use long-term services at home than in facilities.
Care may include:
- Assistance from family members
- Home-based caregivers
- Assisted living
- Memory care
- Nursing facilities
The type and duration of care depend on individual health circumstances.
Some people may need only limited assistance, while others may require years of support.
The Impact on Retirement Savings
A long retirement requires planning for more than everyday expenses.
Housing, food, transportation, taxes, and healthcare are common retirement costs.
Long-term care introduces another variable:
What happens if additional support is needed for months or years?
For some households, paying for care may require using retirement savings, investment accounts, home equity, or other financial resources.
For others, planning may involve insurance products, government programs where eligible, family resources, or a combination of strategies.
There is no single approach that applies to everyone.
The important factor is recognizing the possibility before a crisis occurs.
The Family Impact of Unplanned Care Needs
Long-term care decisions often affect more than the individual receiving care.
Families frequently become involved in decisions about:
- Where care will be provided
- Who will provide assistance
- How costs will be managed
- How responsibilities will be shared
Planning ahead can help families understand preferences and avoid making major decisions during an emergency.
Why Retirement Planning Is Changing
Americans are living longer, and retirement itself may last decades.
That creates a need to think beyond the traditional retirement question:
“Do I have enough saved?”
A more complete question may be:
“Have I planned for the unexpected costs that could occur later in life?”
Long-term care is one of those possibilities.
It may never become a major expense for some retirees.
But for many others, it can become one of the largest financial challenges they face.
Understanding the Risk Before It Becomes a Reality
Long-term care planning is not about assuming the worst.
It is about understanding the possibilities.
The cost of care can vary significantly depending on personal health, location, and the type of assistance needed.
But the financial impact can be substantial.
For retirees, one of the most important steps is understanding the potential risks that may affect retirement income before those risks become immediate concerns.
Because a successful retirement is not only about preparing for the years when everything goes according to plan.
It is also about understanding the costs that can arise when life changes.
Sources & Editorial Standards
The Senior Ledger is committed to accurate, research-based reporting. Articles are developed using publicly available information from government agencies, research organizations, and other reputable sources.
Primary sources reviewed for this article include:
- Administration for Community Living — LongTermCare.gov: How Much Care Will You Need?
- CareScout Cost of Care Survey
- U.S. Department of Health and Human Services research on long-term services and supports
Information is reviewed for accuracy and presented for educational purposes.