How Much Will Your Long-Term Care Needs Cost? It Depends on How Average You Are

Key Takeaways

• Average 65‑year‑old needs $135k for high‑intensity LTC
• Women face $171k cost; men $98k due to longevity gap
• State costs range from half to double national average
• 4%‑7% returns shift required savings from $74k to $187k
• Most boomers’ retirement savings fall short of LTC needs

Summary

Milliman’s 2025 Long‑Term Care Index estimates that a typical 65‑year‑old should earmark $135,000 for high‑intensity care, but costs diverge sharply by gender, health status and geography. Women face an average $171,000 bill versus $98,000 for men, reflecting longer lifespans. State‑level expenses range from half to double the national average, and assumed investment returns (3‑7%) can swing required savings between $74,000 and $187,000. The report underscores a broader call for universal long‑term‑care insurance as many retirees lack sufficient assets.

Pulse Analysis

The Milliman Long‑Term Care Index provides a data‑driven anchor for retirement planners, but its headline $135,000 figure masks substantial heterogeneity. Gender differentials arise because women typically outlive men, extending the duration of paid care and inflating total costs. Health trajectories further complicate forecasts; healthier individuals may require only brief assistance, while chronic conditions can drive expenses into six‑figure territory. Understanding these nuances helps financial advisors tailor savings strategies rather than relying on a one‑size‑fits‑all number.

Investment assumptions are equally pivotal. Milliman’s model uses a 4.35% real return, yet modest shifts to 3% or 7% dramatically alter the capital needed—dropping the target to $74,000 or soaring to $187,000. This sensitivity underscores the importance of realistic portfolio expectations and the role of inflation‑protected assets in LTC planning. Moreover, the median retirement nest egg for 65‑year‑olds sits around $200,000, leaving a thin cushion once health‑related outlays materialize, especially for those without family caregivers.

Geographic disparities add another layer of complexity. Coastal and Northeastern states exhibit costs roughly twice the national average, while many Southern and Mid‑Western regions are markedly cheaper. Some states, like Washington, are experimenting with public‑private LTC insurance schemes that provide a baseline benefit and enable group‑rate purchases. As more jurisdictions explore similar models, policymakers and employers must weigh fiscal sustainability against the growing demand for affordable, long‑term care solutions.