Careful Choices Can Impact Future Long-Term Care Costs

Long-term care presents an unpredictable risk in retirement planning, but one of the few certainties it brings are increasing costs.

Northwestern Mutual, citing 2025 figures, recently calculated that a home health aide providing eight hours of care per day costs more than $99,000 a year, and could exceed $500,000 a year by the 2050s.  Similarly, insurance marketplace MoneyGeek found that 45 U.S. states approved an average of 64% of price-increase requests from long-term-care insurers from 2021 to 2024.

Experts say, despite the costs, long-term care is often left unaddressed in retirement planning.

“The conversation I have with so many people starts with, ‘I want to stay in my home for as long as possible. I never want to go into a facility,’” says Kim Natovitz, a long-term-care specialist and insurance adviser at Trivium Point Advisory LLC. “They make that statement, and that is as much of the conversation as they have around planning.”

Natovitz, who has worked in long-term care planning for more than 25 years, says advisers should encourage clients to think beyond simply purchasing insurance. In her view, a long-term care plan starts with discussing care preferences, identifying decisionmakers and establishing a funding strategy before a crisis occurs.

She warns that long-term care needs can create financial and emotional ripple effects across families. Spouses often become caregivers until their own health deteriorates, while adult children may be forced to contribute time, money and other resources to support their parents later in life.

One common mistake, Natovitz says, is assuming that substantial assets automatically solve the problem.

“Just because you have assets doesn’t mean that they can readily turn into [liquid assets] without there being consequences,” she says. “What I see often is people creating a second problem trying to solve the first problem.”

That issue becomes especially apparent during market downturns. Selling investments to fund care expenses during a correction can compound losses through both market declines and by creating tax consequences, potentially accelerating financial losses.

Testing Scenarios, Expectations

Natovitz believes advisers should stress-test retirement plans against realistic care scenarios and recommends that long-term care planning conversations ideally start up to 10 to 15 years before retirement. Early planning may allow clients to qualify for insurance solutions while they are still healthy and provide more flexibility in funding strategies.

New technologies and planning tools are also emerging to help advisers quantify long-term care risks. Lily Vittayarukskul, CEO and co-founder of Waterlily, an artificial-intelligence-powered platform for long-term care planning, argues that many consumers underestimate how much costs can grow over time because they fail to account for healthcare inflation and varying care needs.

“The power of planning is … you get to choose your care environments proactively rather than reactively,” Vittayarukskul says. “If you want to be at the home to start, that could save you in the future, compared to being in an independent living [facility] or in a community-based service.”

She adds that family involvement can dramatically affect costs as well by reducing reliance on professional caregivers and changing the economics of care planning. However, demographic trends, such as increased longevity, rising dementia rates and declining numbers of multigenerational households, may make family caregiving less available in the future.

Given such complications, experts say that advisers should treat long-term care as a central discussion with their planning clients, rather than a niche concern.

“No financial plan is complete without talking about a plan for long-term care,” Natovitz says. “You don’t have to have a long-term care policy that’s going to pay for all of what potential expenses are, but certainly creating some cash flow, I think, is hugely important.”