Part of our guide: Long-Term Care Insurance: Costs, Options and Planning →
Retirement income planning carefully tallies living expenses and income sources. It rarely accounts for long-term care, one of the largest expenses a retiree can face. Adding it to the conversation makes the plan more realistic, and more complete.
Key takeaways
- Health insurance doesn’t cover long-term care, and Medicare’s coverage is limited to short-term skilled care.
- In 2025, a private nursing home room cost a national median of about $129,600 a year and assisted living about $74,400.
- Without a plan, care is paid from retirement savings, often by selling assets or drawing down 401(k)s at the wrong time.
Could your client absorb an extra $75,000 to $130,000 a year from retirement savings? That’s today’s median cost of care.
Conversation starter 1: living a long life
“Let’s talk about how your plan to live a long life could affect your spouse and children.” Then ask: Who would take care of you? Could that person be a full-time caregiver? Where would you live?
Conversation starter 2: who pays
“Did you know health insurance doesn’t cover long-term care, and Medicare only helps for a short time after an illness or injury?” Then ask:
- Could you pay an extra $75,000 to $130,000 a year from retirement savings?
- Which assets would you use? Would you have to sell investments or draw down your 401(k)?
See what Medicare and Medicaid actually cover.
Build it into the plan
Treat long-term care as a line item in the retirement income plan. Options include traditional coverage, hybrid products funded with assets that aren’t needed for income, or annuity-based LTC for older clients. See asset-based LTC profiles.
Frequently asked questions
Should long-term care be part of retirement planning?
Yes. It’s one of the largest potential retirement expenses and isn’t covered by health insurance or, for the most part, Medicare.
How much should I budget for long-term care in retirement?
It depends on location and type of care. In 2025, national medians ranged from about $74,400 a year for assisted living to about $129,600 for a private nursing room.
Can retirement assets be used to buy long-term care coverage?
Yes. Some clients reposition idle assets or annuities into hybrid long-term care products.
Reviewed by Tim Fuller on 2026-09-25
Tim Fuller
President, SRS Inc.
Tim leads SRS Inc., a full-service IMO (Independent Marketing Organization) and BGA (Brokerage General Agency), connecting independent financial professionals with life, annuity, disability income, and long-term care solutions from 60+ carrier partners.
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