How Likely Are You to Need Long-Term Care After 65?

The Cross-Border Retirement Ledger | Long-Term Care Risk and Retirement Planning in the U.S. and China | Part 1

“I might never need long-term care. Why should I run the numbers?” It’s a fair question. Some people remain independent until the end of their lives. Others need help but can rely on family. If you eventually need someone to help you bathe, get up from a chair, or use the bathroom at night for two or three years, would your retirement plan still work? Two questions help you decide whether to run the numbers. How common is that situation, and how much room would your household have to adapt if it happened?

From age 65 onward, how many people will need care?

In a revised 2022 research brief, the U.S. Department of Health and Human Services’ Office of the Assistant Secretary for Planning and Evaluation (ASPE) used the DYNASIM4 microsimulation model to estimate lifetime care needs for Americans who turned 65 from 2021 through 2025. Among everyone in that group, 56.4% were projected to reach the study’s threshold for needing long-term care. 14.7% were projected to need it for a total of two years to just under five years, and 22.1% for five years or longer. The threshold means needing help with at least two basic activities of daily living for an expected period of at least 90 days, or needing substantial supervision because of severe cognitive impairment. Family members or professionals can provide that help. ASPE, revised 2022 research brief, methods and Table 1

About 44% of the group would never reach that threshold, so “I might never need it” is a real possibility. What makes it worth thinking through is the duration. Out of every 100 people, roughly 15 are projected to need help for two to just under five years, and another 22 for five years or more. A relative can take a few days off to help. Several years of care require someone who can keep showing up.

When people need help, how many use paid care or spend years in a nursing home?

The same 2022 brief projects that 45.3% of the full cohort will use paid long-term care for a significant disability and that 24.1% will use it for less than a year in total. The figures include paid home care, residential care, and nursing home services. Public programs, insurers, or households may pay. The study adds up service days, so 365 days count as a year even if they are spread across several calendar years. Spouses, adult children, and friends often provide some of the help along the way. ASPE, revised 2022 research brief, Table 2

A separate 2019 ASPE study by Richard W. Johnson used longitudinal data from the U.S. Health and Retirement Study from 1995 through 2014. It estimated that about 15% of U.S. adults who survived to age 65 would spend more than two years in a nursing home in total after that age. The study counted nursing home stays of at least 90 days among people who met its definition of severe care needs. Johnson, ASPE 2019 research brief

These estimates use different definitions and methods, so subtracting one percentage from another cannot tell you how many people rely entirely on family. For a family making plans, the practical question is who can cover the care a spouse or other relative cannot provide. A spouse might cook and go along to appointments but struggle to help someone bathe or get up at night. A few hours of paid help may make it possible to stay at home. Some households will need a setting that can provide overnight care.

How many people spend $100,000, and what would that bill mean?

The 2022 ASPE model projects that about 14% of all Americans who turned 65 between 2021 and 2025 will pay at least $100,000 out of pocket for long-term care over the rest of their lives. About 6% will pay at least $250,000. These are cumulative expenses across care settings, measured in 2020 dollars. They exclude the value of unpaid family caregiving time. ASPE, revised 2022 research brief, Table 7

For a retiree with $100,000 in savings, the 14% estimate gives a sense of how common that level of spending is in the study population. The dollar figure shows what it could mean for the household. Most people in the study are projected to spend less than that. For those who do reach $100,000, the bills can add up to the full amount saved, even if they come in month by month. The next question is how much retirement income can cover each month and what happens if the gap lasts for two or three years.

If care lasts two or three years, who can provide it in the U.S. or China?

In either country, spouses, adult children, and paid caregivers can share the work at home. Relatives who live nearby may be able to cover regular shifts. If they live in another state or country, someone local has to provide the day-to-day help. For facility care, the U.S. scenario uses a semiprivate nursing home room. The China scenarios use three residential eldercare budgets from earlier in the series. Staff provide the services specified in the agreement, while relatives may still handle visits, coordinate medical care, and make arrangements when care needs change. Ask who is on duty overnight, what dementia care is available, and what happens to the bill if the resident needs more help.

CareScout’s 2025 survey put the U.S. national median private-pay price for a semiprivate nursing home room at $114,975 a year, or about $9,581 a month. The China scenarios use monthly budgets of RMB 10,000, 15,000, and 20,000, or about $1,493, $2,239, and $2,985 at an assumed rate of RMB 6.7 per U.S. dollar. Actual prices and services depend on the city, facility, and level of care. The scenarios below assume private payment in both countries. Medicare generally does not pay for long-term care consisting solely of help with daily living. Medicaid may help people who meet their state’s eligibility rules. CareScout 2025 Cost of Care Survey · Medicare long-term care coverage

How much do you need to calculate to make a retirement plan?

Assume a retiree has $1,500 to $2,500 a month available for care and $100,000 to $300,000 in accessible savings. The calculations hold prices and exchange rates steady and exclude investment returns, subsidies, separately billed medical costs, and housing or a spouse’s expenses back home. Where two monthly gaps appear, the first is at $1,500 in income and the second is at $2,500. Savings or family contributions cover the difference.

U.S. nursing home, semiprivate room | $9,581 a month. The monthly gaps are $8,081 and $7,081. The shortfall totals about $170,000 to $194,000 over two years and $255,000 to $291,000 over three. Savings of $100,000 would last about 12 to 14 months, and $300,000 would last about 37 to 42 months.

Residential eldercare in China | RMB 10,000 a month. Either income covers the facility fee. The bill alone would require no withdrawals from savings over two or three years.

Residential eldercare in China | RMB 15,000 a month. At $1,500 in monthly income, the gap is about $739 a month, or $17,700 over two years and $26,600 over three. At that fixed rate, $100,000 would last about 135 months and $300,000 about 406 months. At $2,500 in monthly income, income covers the fee.

Residential eldercare in China | RMB 20,000 a month. The monthly gaps are about $1,485 and $485. The shortfall totals about $11,600 to $35,600 over two years and $17,400 to $53,500 over three. At those fixed rates, $100,000 would last about 67 to 206 months, and $300,000 would last about 202 to 618 months.

The months shown are calculated by dividing savings by the monthly shortfall. The further out the estimate goes, the more prices and exchange rates can change. The practical comparison is how much financial room the household would have left at the end of year two or three.

Say you have $2,000 a month available for care and $200,000 in savings. At the U.S. private-pay rate, your savings would last about 26 months. If you need a full three years, you have roughly ten more months to plan for. In China, if a facility charging RMB 15,000 a month can provide the care you need, three years would draw about $8,600 from savings. That scenario raises a different question. Who can visit the facility to check what it provides, and who will stay in touch with staff after you move in?

So why run the numbers if you may never need care? Running the numbers once can show where your current retirement plan might fall short. One household may need to find out who can take over from a spouse. Another may need to know how long it can pay for a nursing home. A family considering a move may first need to confirm that suitable care is available there. Once you know which part needs attention, you know whom to talk to and what to check while there is still time. If you stay independent, the plan can remain in reserve.

By Voice in Between