Why women need to plan for long-term care costs in retirement

For women, living longer on average than men comes with the financial risk of outliving their partners and needing long-term care services, which experts say is worth preparing for.

According to one study, approximately 57 percent of Americans who reach age 65 will develop a disability severe enough to require long-term care. 2022 report From the Department of Health and Human Services. Approximately 1 in 4 women (26%) need such care for more than five years, while the rate for men is 17.5%. The average care period for women is 3.6 years, while for men it is 2.5 years.

“Women are not only more likely to need care. They’re also more likely to need cutting-edge care,” said certified financial planner Laura Mattia, senior vice president and financial advisor with Wealth Enhancement’s Atlas Team in Sarasota, Florida.

“In many cases, a couple’s assets are first used to cover the husband’s care, and then the wife enters the riskiest phase of her life with fewer resources and without a partner to share the burden,” Mattia said. he said.

Women live longer than men on average. The average life expectancy at birth for men in the USA is 76.5 years as of 2024. Centers for Disease Control and Prevention. For women, this average is 81.4 years.

Once you reach age 65, the difference narrows. At this point, according to CDC data, men’s life expectancy increases by another 18.4 years, or up to 83.4 years of age. For women, this average is 20.8 years or 85.8 years.

Medicare, the federal health insurance program for individuals age 65 and older, generally does not cover long-term care. Experts say this will lead to a large unknown but potential expense down the road that needs to be planned for.

Some people who need long-term care are dependent on unpaid caregivers, such as family or friends, or may qualify for Medicaid if their assets and income are minimal. Others self-insure; that is, they have enough assets to cover the potential cost. And still others rely on some form of insurance.

“There’s no one-size-fits-all answer,” said Patti Black, CFP, financial advisor at Savant Wealth Management in Birmingham, Alabama. “It depends on their resources and how much income they have.”

The cost of long-term care also depends on the type of services needed, which can make a big difference. For example, for in-home help, the 2025 national average hourly wage for nonmedical caregiver services was $35 per hour and $90 per hour for a private duty nurse. March report From Genworth Financial, an insurance company.

The average daily rate in 2025 for a semi-private room in a nursing home was $315 per day, or $114,975 per year, and for a private room, it was $355 per day, or $129,575 per year, according to Genworth. The monthly cost of the assisted living facility was $6,200 per year, or $74,400.

For insurance coverage, there are standalone long-term care policies or hybrid options that combine long-term care coverage with life insurance or an annuity.

“You don’t need something that will cover every dollar you’ll spend in a nursing home or have someone come to your home,” said Jeff Judge, CFP, managing partner of Chesapeake Financial Planners in Forest Hill, Maryland. “You just need to bridge the gap between your guaranteed income (pensions, annuities, Social Security) and what the cost might be.”

By 2024, approximately 5.8 million people have independent long-term care insurance coverage through a private policy, According to Millimana business consulting firm. The average age for a new policy in 2023 was 57.

However, depending on your age, health, and the amount of coverage you purchase, these policies can be expensive. And women will generally pay more for insurance coverage than men.

For example, initial coverage costs $165,000 with 3% inflation protection for a healthy 55-year-old woman average $3,750 per yearThat’s according to the American Long Term Care Insurance Association, a trade group. This compares with $2,200 for a healthy 55-year-old man. For healthy 65-year-olds who purchase policies, the cost averages $5,290 and $3,280, respectively.

Either way, as with most types of insurance, these premiums will increase, experts say. Some price increases in the past have been too high, Black said.

“Explore your options and understand what the history of premium increases is and what may happen in the future,” Black said.

Additionally, if you wait to purchase coverage after you start experiencing health problems, the insurance company may deny coverage, he said.

Hybrid policies (life insurance that comes with the benefit of long-term care) have become a more popular choice over standalone policies since about 2014. According to LIMRAis a research and professional organization for the insurance and financial services industry. These policies generally provide coverage if care is needed and, if it is not, a death benefit to your beneficiaries.

“These are still expensive, but there will at least be some benefit, whether it’s long-term care or a death benefit,” Black said. In other words, if you buy a standalone policy and never get the benefits, there’s no payout.

It is also possible to purchase a joint policy, which could help reduce the cost, the judge said. These policies may have individual benefits for each spouse that the other can benefit from if they exhaust their own benefits. Coverage may also include a shared pool of benefits available to both individuals.

“A policy with a spousal and joint pool provides minimal protection at a reasonable price,” the judge said. “It’s potentially a better choice for budget-conscious shoppers or those with younger husbands.”

But she said it’s important to remember that the husband may need care first and can deplete the shared pool.

Still, Judge said it’s “the right solution for most customers rather than not having coverage.” “They just need to understand what could happen and be willing to accept compromises in exchange for a lower monthly premium.”

The most important thing is to start exploring your options long before you need them, Black said.

“Nobody wants to talk about, ‘Gosh, what if I need help going to the bathroom or getting dressed later in life,’ but it’s critical to think about it,” Black said. he said. “I encourage people to take a step forward and talk and explore options because their families will be grateful in the process.”