Long-Term Care Cost Projection: the facts

1. Long-term care is priced by the month, and the price rises faster than most things: care inflation has run ahead of general inflation for decades, because care is labor.
2. The cost that matters is not today's rate but the rate in the year care begins, grown at care inflation, summed over the years it lasts. A need fifteen years away at five percent inflation costs about twice today's number.
3. Example: a $10,000 monthly rate today, rising 5 percent a year, for care that begins in ten years and lasts three: about $16,289 a month at the start, $616,211 in all. Set aside today at a 5 percent return, about $360,000 would cover it.
4. The rate to use is the one from the facilities or agencies you would actually choose, in your area: nursing homes, assisted living, and home care differ by a factor of two or more, and Illinois differs from its neighbors.
5. Insurance, a hybrid life policy, self-funding, and Medicaid after a spend-down are the four ways the number gets paid; the projection is the same whichever is chosen, and it is the first input to all four.
6. A couple has two projections, not one, and a spouse at home has the Illinois protections the Medicaid tools describe.

Educational only, not investment, tax, or legal advice. Results are hypothetical estimates that vary with each use and over time and are not guaranteed accurate or complete. Using this tool creates no client relationship with Considerate Capital, and the site that linked here is not affiliated with it. By using it you agree to the tool terms.