When planning your retirement, you might budget for travel, housing, or hobbies—but do you know how much long-term care could cost you? And more importantly, do you know how you’ll pay for it?
Many retirees are surprised to learn that long-term care is one of the largest—and most unpredictable—expenses they’ll face. Without a solid retirement care plan, these costs can quickly erode your savings and leave your loved ones shouldering the financial burden. In this blog, we’ll break down average long-term care costs in the U.S. (with insights specific to Maryland), and we’ll explore your options for covering those costs—from insurance to Medicaid planning to self-funding strategies.
What Is Long-Term Care?
Long-term care (LTC) refers to the support needed when someone can no longer perform everyday tasks independently due to age, illness, or disability. This includes help with activities like:
- Bathing and dressing
- Eating and using the bathroom
- Taking medications
- Moving around the home
Care can be provided in a variety of settings, including your home, an assisted living facility, or a nursing home.
How Much Does Long-Term Care Cost?
The Genworth Cost of Care Survey 2024 reports the national median costs for common long-term care services:
- Home health aide (44 hours/week): $68,640/year
- Assisted living facility: $64,200/year
- Nursing home (semi-private room): $102,200/year
- Nursing home (private room): $116,070/year
View the full Genworth 2024 Cost of Care Report › https://www.genworth.com/aging-and-you/finances/cost-of-care.html
Long-Term Care Costs in Maryland
Costs in Maryland—especially in areas like Bowie or Silver Spring—tend to be slightly above the national average due to higher living expenses:
- Home care in Montgomery County can exceed $35/hour
- Private nursing home rooms can surpass $130,000/year
- Assisted living communities often start around $6,000/month
The U.S. Department of Health and Human Services estimates that 70% of people over age 65 will need some form of long-term care, often for three years or more. That’s over $300,000 in potential expenses—per person.
Will Medicare Cover Long-Term Care?
One of the biggest misconceptions in retirement planning is the assumption that Medicare will cover long-term care. In reality:
- Medicare covers short-term skilled nursing care (after a hospital stay), usually up to 100 days.
- It does not cover custodial care, which makes up the bulk of long-term care needs.
How to Pay for Long-Term Care in Retirement
There are several ways to fund long-term care, but each comes with pros and cons. The best choice depends on your health, finances, and overall retirement care plan.
- Long-Term Care Insurance
LTC insurance is designed specifically to cover services like in-home care, assisted living, and nursing homes.
Pros:
- Protects your savings from large expenses
- Provides flexibility and choice in care settings
- May offer tax advantages
Cons:
- Premiums can be high—especially if you apply later in life
- In many cases, depending on your policy specifications you may not get your money back.
In Maryland, a 55-year-old buying a policy today might pay between $1,800–$3,000/year, depending on benefits and inflation protection.
- Hybrid Insurance Products
These combine life insurance or an annuity with long-term care coverage. If you don’t use the LTC benefit, your heirs receive a death benefit. These are ideal for those concerned about “wasting” premiums but tend to require higher upfront costs.
- Self-Funding (Paying Out-of-Pocket)
Some retirees set aside a portion of their savings specifically for care—through HSAs, high-yield savings accounts, or investments.
Pros:
- Full control over how money is used
- No policy restrictions or insurer involvement
Cons:
- Requires substantial assets
- May force liquidation of investments during down markets
- Can impact your spouse or heirs
Tip: Consider creating a separate account for long-term care and calculating future needs based on inflation-adjusted local costs.
- Medicaid Planning
Medicaid is the largest payer of long-term care services, but eligibility requires spending down most of your assets.
Planning strategies include:
- Asset protection trusts
- Spousal impoverishment provisions
- Gifting strategies (subject to a 5-year lookback period)
If you’re in Maryland, work with an elder law attorney familiar with local Medicaid rules to structure your assets legally and efficiently.
Don’t Forget the Emotional Cost
The cost of long-term care isn’t just financial. Family caregivers—often adult children—frequently suffer from burnout, lost income, and strained relationships. Having a clear plan in place not only protects your finances but also reduces stress on your loved ones.
Key Takeaways for Your Retirement Care Plan
- Long-term care can cost $70K–$130K per year, depending on the setting and location.
- Medicare won’t cover the majority of LTC expenses.
- Options for payment include LTC insurance, hybrid policies, self-funding, and Medicaid.
- Planning ahead—ideally in your 50s or early 60s—gives you more choices and lower costs.
Call to Action: Let’s Build Your Retirement Care Plan Together
Long-term care costs can take families by surprise—but they don’t have to. With proper planning, you can protect your finances, reduce stress on your loved ones, and maintain your independence as you age.
Schedule a free consultation today to discuss your retirement goals and explore your long-term care coverage options. Whether you’re in Bowie, Silver Spring, or anywhere in Maryland, we’ll help you create a personalized plan that fits your future.