Long-Term Care Savings Lasted Less Time by 2025
Rising care costs mean a $250,000 savings buffer now covers one year less of expenses than it did in 2020.
Updated on Oct. 5, 2026 in Financial Planning
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A $250,000 savings cushion for long-term care now provides roughly 2.8 years of coverage, down from 3.8 years in 2020. This shift reflects rising median care costs across the United States.
Why it matters
With 70% of 65-year-olds projected to need long-term care, the decreasing effectiveness of a fixed savings buffer complicates retirement planning. Many households must now account for higher service costs when determining their long-term financial security.
A $250,000 savings buffer now covers 2.8 years of care, down from 3.8 years in 2020. This coverage varies by setting, with the same amount depleted in 2.2 years for a nursing home, 3.1 years for in-home care, or 3.4 years for assisted living.
The players
CareScout
A research entity that tracks and analyzes the costs and accessibility of long-term care services for consumers.
U.S. Census Bureau
The federal agency that provides demographic and economic data, including national net worth statistics.
The details
Researchers calculated how quickly median state-level costs for nursing homes, assisted living, and in-home care would exhaust a $250,000 savings account. As care costs rise, the purchasing power of these savings shrinks, forcing households to re-evaluate their long-term security. Only 3% of Americans over age 50 currently hold long-term care insurance to mitigate these rising out-of-pocket risks.
Timeline
2020: A $250,000 savings buffer covered 3.8 years of care.
2025: A $250,000 savings buffer covered 2.8 years of care.
September 22, 2026: CareScout published the Cost of Care report.
Money Landscape
This decline in coverage follows a documented trend of rising long-term care costs that is outpacing many traditional savings strategies. It marks a departure from earlier periods where smaller balances were sufficient to fund several years of professional care.
Households should review their current retirement savings projections against today's median care costs rather than relying on outdated figures from several years ago. Consider speaking with a qualified financial professional to determine if your long-term care strategy requires adjustments.
The takeaway
The sharp drop in how long savings last underscores the necessity of factoring care costs into early retirement planning. Given that 20% of 65-year-olds will require care for more than five years, review your current savings trajectory and long-term care coverage options.
Further reading
For more on managing costs for your future, see our guide to Financial Planning.
Source note: This article includes information reported by Forbes.
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