This One Retirement Expense Is Projected To Cost $500K by 2058: Are You Prepared?
Written by
Gabrielle Olya
Edited by
Molly Sullivan
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Many Americans expect to live a long time in retirement. A recent Northwestern Mutual study found that 59% of U.S. adults believe their retirement will last longer than their parents’.
Given their longevity expectations, it’s no surprise that most Americans (61%) believe it’s likely they’ll need long-term care services at some point — yet many are unprepared for what could be astronomical costs.
Here’s how much you should expect to pay for long-term care, and how to be prepared for those expenses.
The Rising Costs of Long-Term Care
As of 2024, the annual cost of a home health aide providing eight hours of care per day is $96,360. If those costs hypothetically increase by just 5% annually, potential out-of-pocket costs could reach $506,213 by the year 2058. While this is a daunting number for younger generations to see, it should serve as a reminder of the necessity to plan ahead.
“Try not to get overwhelmed by that $500,000 figure,” said Elizabeth Miskovich, partner and private wealth advisor with KRM Generational Wealth Advisors, a Northwestern Mutual Private Client Group. “It isn’t meant to alarm — it’s meant to inform.”
She noted that there are ways to cover those costs that go beyond personal savings.
“The costs you encounter can vary depending on the type of care needed and where it is provided, but planning for care isn’t an all-or-nothing approach,” Miskovich said. “There are accessible tools — from insurance solutions to strategic savings — that can help people prepare at a level that fits their situation.”
Smart Ways To Prepare Financially for Long-Term Care Costs
The good news is that if you’ll be needing long-term care in 2058, you have over 30 years to prepare financially — but you shouldn’t wait to start planning.
“Proactive planning today can protect assets, reduce stress and ensure you’re able to receive care in the setting you prefer,” Miskovich said. “A financial plan that integrates long-term care planning, diversified savings and tax-advantaged strategies, like permanent life insurance or Roth conversions, can offer flexibility later.”
If you’re not sure where to start, begin with a diversified portfolio.
“Build a plan that allows for future growth,” Miskovich said.
Long-Term Care Planning Tips for Boomers and Gen X
If you’re in or near retirement, you may not need to shell out $500,000 annually for long-term care needs, but you should still expect low six-figures in out-of-pocket costs.
Yet, many Americans in this boat are not financially prepared. According to the study, only 42% of boomers and 35% of Gen Xers have planned financially for the possibility that they’ll need long-term care for themselves.
“While earlier is always better, it’s never too late to assess your options and prepare,” Miskovich said. “For the boomers and Gen Xers nearing retirement, look at ways to protect assets through product solutions, spend-down strategies or guaranteed income tools like annuities.”
A good financial plan is about maximizing what’s possible, not focusing on what’s already past.
“Working with a financial advisor can uncover choices you may not have realized you still have,” Miskovich said.
This can include long-term care insurance.
“Like many forms of insurance, long-term care coverage is more effective and affordable when planned early,” Miskovich said. “But even later in life, there are evolving options, including hybrid solutions that combine life insurance and long-term care benefits, that may be more accessible than people realize. That’s where personalized advice really matters.”
No matter what age you are now, start your long-term care planning today to protect your future.
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