Long-Term Care Coverage Shrank Since 2020
A $250,000 savings buffer covered 2.8 years of care in 2025, down from 3.8 years in 2020.
Updated on Oct. 5, 2026 in Financial Planning
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Data from the CareScout 2025 Cost of Care survey revealed that rising service costs have reduced the duration of care that a $250,000 savings buffer can provide. As of 2025, that amount covers only 2.8 years of long-term care nationwide, a decrease from the 3.8 years of coverage it provided in 2020.
Why it matters
Rising costs for nursing homes and home-based services are outpacing personal savings, leaving many retirees at risk of exhausting their funds prematurely. With 70% of 65-year-olds likely to need some form of long-term care, these findings underscore the significant financial pressure facing aging Americans.
A $250,000 savings pool covers 2.2 years in a nursing home, 3.1 years of in-home care, or 3.4 years in assisted living. Only 3% of Americans over age 50 currently hold long-term care insurance protection.
The players
CareScout
This organization specializes in researching and providing information regarding long-term care services and costs.
The details
CareScout analyzed median state service costs against U.S. Census Bureau net worth data to determine how quickly specific care settings deplete a $250,000 nest egg. The analysis highlights that one-fifth of 65-year-olds will eventually require care lasting longer than five years, significantly exceeding the current average coverage duration.
Timeline
In 2020, $250,000 provided 3.8 years of care coverage.
By 2025, the same savings amount provided only 2.8 years of care coverage.
CareScout published the Cost of Care report on September 22, 2026.
Market Dynamics
The findings align with the 2025 CareScout Cost of Care survey, which illustrates a broader structural shift where the cost of essential services is increasingly decoupling from historical savings benchmarks. This trend challenges traditional retirement planning models that fail to account for escalating long-term care expenses.
Retirees must re-evaluate their long-term care strategies to account for the reality that a standard savings buffer may cover significantly less time than anticipated. This shift suggests a potential need to explore alternative funding vehicles or insurance options to protect assets against extended care needs.
The takeaway
Individuals should consider adjusting their retirement savings targets to account for the rising cost of professional care services. Planning for a care duration longer than three years is essential given that 20% of seniors will eventually require assistance for over five years.
Further reading
For more information on managing retirement assets, visit the United States Financial Planning section.
Source note: This article includes information reported by Forbes.
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