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Long-Term Care Required Savings

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Long-term care, which includes expenses for nursing homes and other services such as extended in-home care, is an expense that is difficult to afford without long-term planning. The cost of a private room in a nursing home can be more than $100,000 per year, depending on your location. Use this calculator to estimate the cost of long-term care and see what it would take to attempt to save for this expense.

Long-Term Care Required Savings Definitions

Your current age
Your current age.
Annual cost of long-term care
This is your current estimated cost of long-term care. This is your current estimated cost of long-term care. According to the Genworth Financial 2020 Cost of Care Survey, the estimated median annual cost for a nursing home stay was $93,075 per year for a semi-private room. This is about $255 per day. The cost for a private room was $105,850 or $290 per day. Assisted living at home can cost more than $54,912 per year or $150 per day for a home healthcare aid. All of these long-term care costs can be considerably higher in larger metropolitan areas.
Years before long-term care begins
Estimated number of years before your long-term care needs begin.
Years of long-term care
Estimated number of years you expect to need long-term care coverage.
Expected inflation rate
This is what you expect for the average long-term inflation rate. A common measure of inflation in the U.S. is the Consumer Price Index (CPI). From 1925 through 2022 the CPI has a long-term average of 2.9% annually. Over the last 40 years the highest CPI recorded was 13.5% in 1980. For 2022, the last full year available, the CPI was 8.0% annually as reported by the U.S. Bureau of Labor Statistics. The tool will increase the cost of your long term care by this rate each year.
Amount currently saved
Total you currently have saved toward your long-term care needs. This should not include other savings that you will need to fund your retirement, living expenses or other savings needs. Only include money specifically allocated to your long-term care needs.
Additional monthly savings
Enter how much you are saving per month towards your long-term care costs. This calculator also assumes that you make your contribution at the beginning of each month.
Estimated rate of return
This is the annually compounded rate of return you expect from your investments. For the purposes of this calculator, taxation is not factored into the results. If you pay taxes on the interest, dividends or capital gains from these investments, you may wish to enter your after-tax rate of return. The actual rate of return is largely dependent on the types of investments you select. The Standard & Poor's 500® (S&P 500®) for the 10 years ending December 31st 2022, had an annual compounded rate of return of 13.6%, including reinvestment of dividends. From January 1, 1970 to December 31st 2022, the average annual compounded rate of return for the S&P 500®, including reinvestment of dividends, was approximately 11.3% (source: www.spglobal.com). Since 1970, the highest 12-month return was 61% (June 1982 through June 1983). The lowest 12-month return was -43% (March 2008 to March 2009). Savings accounts at a financial institution may pay as little as 0.25% or less but carry significantly lower risk of loss of principal balances.

It is important to remember that these scenarios are hypothetical and that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are generally subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment. It is not possible to invest directly in an index and the compounded rate of return noted above does not reflect sales charges and other fees that investment funds and/or investment companies may charge.