Long-term care savings are buying less
Americans are living longer than ever, and the money many of them set aside for care in those later years is covering less of it.
Life expectancy in the United States reached a record 79 years in 2024, topping the pre-pandemic peak set in 2019, according to the Centers for Disease Control and Prevention. Over roughly the same period, the amount of long-term care that $250,000 in savings can pay for has been shrinking. That sum now covers about 2.8 years of long-term care nationally, down from 3.8 years in 2020, according to a new analysis of long-term care costs in every state by CareScout. The figure has declined every year since 2020 and now sits at its lowest point this decade.
The two trends are connected. More years of life can mean more years in which long-term care is needed, and the need is common. Seven in 10 people who make it to 65 will at some point need substantial help with daily living, based on a federal study of lifetime long-term care risk that found 70% of them develop severe long-term care needs. The population facing that risk is growing, too: Americans 65 and older numbered 64.6 million in 2025, up 16.2% in five years, according to the Census Bureau.
To measure how far savings go, CareScout took median annual prices from its 2025 Cost of Care Survey for three types of long-term care in each state, a non-medical caregiver at home, an assisted living community and a semi-private nursing home room, and calculated how long $250,000 would pay for each. The three results were averaged into a single score per state.
The level of care matters as much as the amount saved. Nursing home care, with a national median of $114,975 a year for a shared room, burns through $250,000 in 2.2 years. The same money stretches to 3.1 years when it pays a caregiver at home, at $80,080 a year, and to 3.4 years in assisted living, at $74,400.
Those settings are often stages rather than choices. The report notes that as health needs escalate, many people move from help at home to assisted living and eventually to a nursing home, the costliest of the three. Its advice is to budget for that progression rather than for the least expensive setting, which can leave a family short at exactly the point when costs spike.
Many families also count on coverage that is not there. The report identifies a widespread belief that Medicare pays for long-term care, a belief that often lasts until the first bill arrives and savings have to cover it. Medicare’s annual enrollment window opens Oct. 15, a natural moment to check what a plan does and does not pay for.
Where someone lives matters nearly as much as what they need. Arkansas stretches $250,000 furthest, to 3.9 years. In Mississippi, which has the lowest in-home care and assisted living prices in the nation, it lasts 3.8 years. At the other end, the money runs out in 1.9 years in both Alaska and Hawaii. Alaska’s semi-private nursing home rooms cost a median $333,975 a year, enough to exhaust $250,000 in about nine months, and Hawaii has the country’s most expensive assisted living at $145,155 a year.
The report also found that care tends to be cheapest where people are least likely to have savings to spend on it. Eleven states have a typical senior household net worth below $250,000, and most of them rank near the top for how far that sum goes.
Because the figures are statewide medians, prices in a given town or facility can run higher or lower. The trend line, though, points one way. The added years that longer lives bring are a public health achievement. Paying for the care some of those years will require is a separate problem, and on current numbers, the same savings cover less of it each year.
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