Long-Term Care Costs Up to $130K a Year Threaten Inheritance

A year of private nursing-home care now costs a national median of $129,575, a figure that can quietly consume the assets most parents intend to pass to their children unless long-term-care expenses are built into retirement and estate planning. Roughly 70 percent of people turning 65 can expect to need some form of long-term care during their lives, according to the U.S. Department of Health and Human Services, yet the CareScout 2025 Cost of Care Survey shows the price of that care climbing well past $100,000 a year for the most common facility arrangements.

The gap between expectation and exposure is wide. A Morning Consult survey commissioned by Kiplinger for its Trillion Dollar Talk campaign found that 47 percent of parents expect to leave a meaningful inheritance, while 24 percent worry that long-term-care or healthcare costs could deplete their estate. Nearly three in 10 parents have no formal estate plan, and 41 percent have a will, the survey found. Because Medicare and traditional health insurance generally do not cover ongoing custodial care such as help with bathing, dressing or eating, the burden of paying for those services tends to fall on personal savings, retirement income or insurance products.

CareScout's 2025 survey put the national median cost of in-home care at $80,080 a year, assuming 44 hours of care per week, and assisted-living community care at $6,200 a month, or $74,400 annually. Nursing-home care ran $315 a day, or $114,975 a year, for a semi-private room and $355 a day, or $129,575 a year, for a private room. Several years of care at those rates can draw down savings and other assets substantially, leaving less for heirs even when a family had planned carefully.

The planning levers available before a health crisis can blunt that impact. A health savings account, for those eligible, offers a tax-advantaged way to set aside money for future medical expenses, with balances that roll over from year to year and can be withdrawn tax-free for qualified costs. HSA funds can also pay qualified long-term-care insurance premiums, subject to annual IRS limits that scale with age. Long-term-care insurance is another option, though coverage varies by policy, with elimination periods before benefits begin and caps on daily, monthly and lifetime payouts. No single strategy fits every household, and a mix of savings, retirement income, insurance and other assets is often the practical answer.

Estate documents deserve the same scrutiny as the care budget. A will, trust, power of attorney and beneficiary designations should be reviewed periodically to confirm they still reflect current wishes, and the value of assets today may not match what is ultimately passed down once retirement spending and care costs are subtracted. Roughly two in five families have never discussed plans for passing down money and assets, the survey found, and among parents who have not talked through the details, 34 percent cite too many unknowns, including how long they will live and how much they will ultimately leave behind.

Those conversations do not require quoting an exact inheritance figure. They can instead cover the plans in place, how assets may be used during a parent's lifetime including care costs, and whether children are expected to help manage finances or provide care. Making sure children know where to find account details, insurance policies and estate documents before a health crisis gives families time to ask questions and prepare, rather than making rushed decisions under stress. The inheritance a parent expects to leave may shift as care needs evolve, but planning for those costs now can protect retirement security while keeping estate goals within reach.

This article is for informational purposes only and does not constitute professional advice. Long-term-care costs, insurance terms, HSA rules and IRS limits change over time; readers should verify current figures and policy details against the latest official announcements before making decisions.