Long-Term Care Cost Planner

Long-term care, help with daily activities at home, in assisted living or in a nursing home, can be one of the largest costs later in life. Healthcare professionals see this every day but often don't plan for it themselves. This calculator estimates the future cost and how much to set aside.

What this calculator does

Choose the type of care and, optionally, enter today's local yearly cost. Then enter how many years of care to plan for, how many years until care might start, care cost inflation and the return on money you set aside. It shows:

• the estimated total cost of care in future dollars,
• the yearly cost when care starts,
• the amount to set aside today, and
• the monthly savings needed until then.

The formula in plain English

Yearly cost today = the amount you enter, or a typical U.S. figure for the type of care: about $75,000 for in-home care, $70,000 for assisted living and $120,000 for a private nursing home room.

Future yearly cost = today's cost × (1 + care inflation) raised to the years until care starts.

Total cost = each year of care at its inflated cost, added together.

Set aside today = each year's future cost discounted back to today at your expected return.

Monthly savings = the amount that, saved monthly at your return, grows to cover the cost when care begins.

A worked example

Dr. Allen is 55 and wants to plan for three years of assisted living starting in about 25 years. He uses the typical cost of $70,000 a year, 3.5% care inflation and a 5% return.

• Yearly cost when care starts: about $165,400.
• Total cost of three years: about $513,900.
• Set aside today: about $144,500.
• Or save each month: about $845 for 25 years.

Many people combine approaches: some savings, a hybrid insurance policy, and home equity.

Why it matters at each career stage

If you're: Employed

In your 40s and 50s, start thinking about long-term care. Insurance premiums rise with age and health changes, so the timing of a decision matters.

If you're: Practice owner

If you plan to sell your practice to fund retirement, include possible care costs in your target. A large practice sale can make self-funding more realistic.

Ways to pay for long-term care

Self-funding. Savings and investments set aside for care. Flexible, but you carry the risk.

Traditional long-term care insurance. Pays a daily or monthly benefit for care. Premiums can rise over time.

Hybrid life/LTC policies. Life insurance or annuities with long-term care benefits. Usually more expensive but with a guaranteed benefit.

Home equity. Selling or borrowing against a home can help fund care.

Family care. Many families provide some care themselves, which has real costs in time and income.

Planning with your family

Talk with family about your wishes: where you'd want care, who might help, and where your documents are. Make sure you have a durable power of attorney and healthcare directive. Planning ahead reduces stress for everyone.

Care at home vs in a facility

Most people prefer to stay at home as long as possible. In-home care can cost less than a facility for a few hours a day, but around-the-clock care at home can cost more than a nursing home. Home modifications, like grab bars, ramps and a first-floor bedroom, can make staying home safer and delay the need for more care.

About the numbers

Long-term care costs vary a lot by state and city, and the typical figures here are rough estimates. Check local costs for the type of care you'd want. Use a range of years of care to see how sensitive the plan is.

Next, find your FI number, review your life insurance and check your disability coverage.