A research-focused look at care costs, coverage limitations and the effect long-term care can have on retirement assets.
This publication is educational and uses government, regulatory, legal-industry and institutional sources. It is not individualized legal, tax, investment or insurance advice.
Long-term care is not synonymous with a nursing home. It can include help with activities of daily living at home, adult day services, assisted living, memory support and nursing-home care. Medicare states plainly that it does not pay for most long-term custodial care when that is the only care a person needs. Medicare may cover limited skilled services when its conditions are met, but that is different from paying for years of ongoing help with bathing, dressing, eating, transferring or supervision.
The financial scale can be substantial. CareScout’s 2025 national medians report a non-medical caregiver at $35 per hour, or about $80,080 per year when modeled at 44 hours per week; assisted living at $6,200 per month, or $74,400 per year; a semi-private nursing-home room at $114,975 per year; and a private room at $129,575 per year. Actual costs vary materially by geography, care intensity and provider, but these figures show why long-term care is a retirement-income issue as much as a health issue.
The latest national benchmarks
As of 2026, the newest CareScout national survey reflects 2025 provider rates. Its national medians are useful planning benchmarks: adult day health care at $95 per day; assisted living at $6,200 per month; non-medical home care at $35 per hour; a semi-private nursing-home room at $315 per day; and a private room at $355 per day. These are medians, not quotes. Local prices can be substantially higher or lower.
Duration turns an annual expense into a portfolio event
At the national median, three years of assisted living would total about $223,200 before future price increases. Three years in a private nursing-home room would total about $388,725 at today’s median. A couple could face overlapping or sequential care needs, which is why planning solely around one person’s one-year cost can understate the household risk.
Home care is not automatically inexpensive
Families often assume remaining at home is the low-cost option. It can be when only a few hours of help are needed. But at $35 per hour, 44 hours per week produces the CareScout annual benchmark of roughly $80,080. Round-the-clock paid care can be dramatically more expensive. Home modifications, transportation and family caregiver time may add costs not captured in the hourly rate.
Inflation matters because care may be decades away
A 55-year-old planning for possible care at 80 is not planning around today’s price alone. Even moderate annual increases compound over 25 years. Insurance inflation benefits, dedicated assets and retirement-income assumptions should therefore be evaluated using future—not merely current—cost scenarios.
Medicare is not a general long-term-care funding strategy
Medicare distinguishes short-term skilled care from ongoing custodial care. It generally does not cover long-term custodial services when that is the only care needed. Medicaid may pay for long-term services for people who meet state eligibility rules, while others rely on personal assets, family support, private insurance or combinations of these resources.
References & further reading
- CareScout, 2025 Cost of Care Survey.
- Medicare.gov, Long-Term Care Coverage.
- Medicare.gov, Nursing Home Care.