The Key Expense You Forgot To Put in Your Retirement Plan
Written by
Kerra Bolton
Edited by
Jenna Klaverweiden
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Most Americans spend years preparing for retirement but forget one of the most expensive items: long-term care. As reported by CBS News, nearly 70% of retirees will need it, and costs can top six figures. Yet most retirement calculators leave it out. That oversight can force families to tap savings too early, sell assets under pressure or rely on unpaid caregivers.
Experts said planning ahead, before health issues arise, can make the difference between financial stability and a retirement derailed.
Why Long-Term Care Gets Overlooked
Unlike fixed expenses, long-term care costs are unpredictable and phased.
“Most retirement calculators are built for clean math and predictable averages, but the journey of long-term care is rarely clean or predictable,” said Lily Vittayarukskul, co-founder and CEO of Waterlily. “Unlike a mortgage payment, care isn’t a single fixed cost. It unfolds in phases, often starting with just a few hours of help at home and gradually evolving into full-time support as a person’s needs change.”
Many families also assume Medicare covers more than it does, leaving significant coverage gaps.
“Long-term care expenses are a major reason the average American will need nearly $200,000 for retirement healthcare,” said Whitney Stidom, vice president of consumer enablement at eHealth. “It’s important to save for these costs early and understand what Medicare does and doesn’t cover, including as it relates to long-term care versus services such as skilled nursing.”
The Emotional and Financial Toll
Vittayarukskul said long-term care hides in plain sight because it’s a financial problem wrapped in an emotional one. Planning for medical bills feels routine. However, planning for personal care, like bathing, cooking or mobility, feels uncomfortable.
“The need for this kind of support often starts quietly, with costs that seem manageable in the beginning,” Vittayarukskul said. “But as the months and years go on, the needs grow, the budget stretches thin, and eventually, the financial dam breaks.”
Families often postpone the conversation until a crisis forces decisions.
“We routinely see families scrambling when an aging parent suddenly needs care,” said Jeremy Clerc, founder and CEO of Assisted Living Magazine. “Long-term care is critical not only due to its cost, but also its emotional impact: it affects retirees and their families who may become caregivers or financial supporters.”
How To Prepare Now
Vittayarukskul said the best way to prepare for long-term care is to take out the guesswork and follow a clear, linear plan. It’s the blueprint Waterlily uses in its technology.
- Start with a care blueprint. Factor in health, family support and location to project likely timing, intensity and local costs, rather than relying on national averages.
- Size the problem. Translate that plan into today’s dollars and project costs year by year with inflation to identify any gap.
- Choose funding on purpose. Set up a dedicated “care bucket,” trim recurring expenses and consider long-term care insurance, hybrid policies or annuities, and using health savings accounts (HSAs) for eligible expenses.
- Organize support. Name financial and healthcare proxies and have honest family discussions about caregiving roles to reduce the need for paid care.
Long-term care isn’t a fringe expense. It’s a near certainty for most retirees.
By factoring it into retirement planning early, retirees can better protect their savings, preserve independence and avoid tough financial trade-offs down the road.
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