If I end up needing long-term care, how much would it cost?
It depends on what type of care you need and where you live. On average, the daily cost of a private room in a nursing home is now $219, which adds up to nearly $80,000 per year, according to a new study by the MetLife Mature Market Institute. A private room in an assisted-living facility now averages $3,131 per month. And home health aides charge $21 per hour, on average.
The prices vary a lot by location. For example, the average cost of a private nursing-home room is $171 per day in Alabama, but it’s $286 in California. Average monthly assisted-living costs are $4,365 in Maine but $2,568 in Louisiana. And home health aides charges an average of $28 per hour in Phoenix but just $14 in Birmingham, Ala. See the full list of costs by location in the MetLife Mature Market Institute study.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
No matter where you live, such expenses could quickly eat away at your retirement savings because Medicare doesn’t cover long-term care. And keep in mind that the costs are likely to be much higher by the time you need care -- especially if you’re in your fifties or sixties now. The average cost of a nursing-home room increased by more than 3% last year. If prices continue to rise at that rate, one year of nursing-home care could cost nearly $170,000 in 25 years, when a 55-year-old is likely to need care. Care in your home may cost even more -- and those rates rose 5% last year.
Long-term-care insurance can protect your savings from burdensome bills. Policies are now less expensive than previous versions, yet they still provide enough coverage for most people’s long-term-care needs. See How to Minimize Long-Term-Care Premiums for details. However, be sure to include some form of inflation protection with your long-term-care policy because the cost of receiving care continues to rise.
Got a Question? E-mail Kim at askkim@kiplinger.com
-
Stock Market Today: Dow Adds 654 Points as 3M Stock Explodes HigherIt was a risk-on day for stocks thanks to an upbeat inflation reading and impressive earnings from 3M and Deckers.
-
3M Leads Dow Stocks After Massive Earnings Beat3M stock is headed toward its best day ever after the industrial conglomerate's impressive earnings report. Here's what you need to know.
-
Short-Term Insurance Plans' Good, Bad and Uglyretirement You'll need a clear-eyed analysis to gauge the value of short-term care insurance plans and if they're right for you.
-
Retirees, This Is What It Takes to Be Your Own InsurerLong-Term Care Insurance The costs of long-term care are already exorbitant and will only get worse. Follow this guidance to get in front of the issue.
-
You Can Keep Some Assets While Qualifying for Medicaid. Here's HowLong-Term Care Insurance There are some tools you can use to avoid spending down all of your assets, and potentially impoverishing a spouse, while still meeting the qualifications for Medicaid.
-
Insurance for Long-Term Care at Homeretirement In the wake of COVID-wracked nursing homes, increasingly more people are looking at options to age in place with long-term care insurance.
-
Time for an Insurance ReviewCoronavirus and Your Money You may need to update your policies in light of COVID-19.
-
The Real Reasons People Decide to Buy Long-Term Care InsuranceLong-Term Care Insurance Before you dig into costs, benefits and contingency plans, step back and look at the big picture. This decision is bigger than budgets and life-expectancy tables. It's about your family and your wishes for them as well as yourself.
-
Avoid the Obstacles of Long-Term-Care ClaimsLong-Term Care Insurance Filing a claim can be an ordeal, but these preventive measures will streamline the process.
-
What to Know Before Purchasing a Long-Term Care RiderLong-Term Care Insurance Do you know the difference between a long-term care rider and chronic illness rider? Section 7702B and Section 101(g)? If you're contemplating a life insurance policy or annuity with a long-term care rider, make sure to understand the key terms.
