Many Americans approaching retirement overlook a critical expense: long-term care (LTC). A recent study by the National Council on Aging and the LeadingAge LTSS Center at UMass Boston found that 80% of adults over 60 lack the financial resources to pay for non-medical long-term care out of pocket. Yet research shows that a person turning 65 today has nearly a 70% chance of needing some type of LTC services during their lifetime.
The challenge is growing as the U.S. population ages. Costs for custodial care services continue to rise, driven by inflation and a shortage of skilled care workers, according to Skilled Nursing Care. Skilled nursing rooms, in particular, have seen the largest increases in price.
Who Pays for Long-Term Care in a Nursing Home?
The simple answer: you do. Many federal retirees mistakenly assume FEHB or Medicare will cover the cost of long-term care in a nursing home. While these programs cover medically necessary services, they do not pay for non-medical custodial care. New applications to the Federal Long-Term Care Insurance Program have been suspended until December of 2026, meaning those seeking coverage will have to rely on the private marketplace.
Depending on your location, the average private room in a nursing home can cost up to $10,000 per month. Without LTC insurance, you may need to rely on your Thrift Savings Plan (TSP), home equity, or other savings to cover the expense.
Longevity Matters
Some people assume they won’t live long enough to need long-term care—but statistics suggest otherwise. When asked about their odds of reaching age 80, only 58% of men and 64% of women aged 65 thought they would get there. In reality, a 65-year-old man has a 66% chance, while a woman has a 75% chance. And if you reach age 69, your likelihood of hitting 80 increases even further.
Are You Prepared?
Ignoring the risk of needing long-term care can seriously impact your retirement if you’re unprepared. LTC may become necessary at any age due to a heart attack, stroke, or accident, leaving you unable to care for yourself.
The question is: can you cover the cost if it happens? A Federal Retirement Consultant (FRC®) can help you evaluate your options and create a plan to protect your retirement savings.
