Long-Term Care Cost
What a period of long-term care would cost, and the gap between that and the assets available to pay for it. The risk is not the annual cost but the number of years.
| Year | Cost |
|---|---|
| Year 1 | $110,000 |
| Year 2 | $114,400 |
| Year 3 | $118,976 |
Σ C·(1+i)^k · Each year inflated separately.
total − assets − income · The insurable amount.
A clear path from inputs to results.
What a period of long-term care would cost, and the gap between that and the assets available to pay for it. The risk is not the annual cost but the number of years.
How to use
- Set annual care cost ($).
- Set years of care.
- Set cost inflation (%).
- Set assets available ($).
- Read the headline metrics, then check the table for the detail.
The formula
Reference: Inflated care costs against available assets and income, following the NAIC Shopper’s Guide to Long-Term Care Insurance.
Worked example
At the default inputs
- Annual care cost ($): 110000; Years of care: 3; Cost inflation (%): 4; Assets available ($): 400000; Retirement income ($/yr): 45000
- 1
Total care cost: $343,376 · Assets plus income: $535,000 · Funding gap: $0.00 · Annual equivalent: $114,459
Total care cost: $343,376 · Assets plus income: $535,000 · Funding gap: $0.00
Interpreting the result
3 years of care at $110,000 inflating at 4.0% costs about $343,376.
Assumptions & limitations
- Care costs inflate at a constant rate.
- No Medicaid or state assistance.
Frequently asked questions
What is the real risk?
The number of years, not the annual cost — the distribution has a long tail.
Does Medicare pay?
Only for a short skilled-nursing stay after a hospital admission, not for custodial care.
Methodology last reviewed 2026-10-22. Results are informational and not financial or engineering advice — see our disclaimer.