Long-term care cost projections — planning for three, five, ten years
Reviewed by the How To Help Your Elders editorial team | Updated March 2026
The math on your parent's savings and care costs probably doesn't add up the way you hoped. This article gives you a real framework for projecting those costs over three, five, and ten years so you can make decisions based on numbers rather than anxiety. Running the projections now is the single best way to avoid a financial crisis later.
The Only Way to Avoid a Crisis Is to See It Coming
You're looking at your parent's savings and trying to do math that doesn't add up. The monthly expenses are going up. Medical costs are unpredictable. Your parent's health might be stable for years or could change next month. Everyone keeps asking whether you can afford long-term care, but nobody wants to talk about what happens if you can't.
This is not about doom. It is about seeing what the actual numbers suggest and making choices based on reality instead of hope.
Projecting long-term care costs matters because it is the only way to know if you're on a sustainable path or heading toward a crisis. If you can see that your parent's savings will be gone in two years at the current rate, you have options. You could apply for Medicaid. You could move your parent to less expensive care. You could explore insurance options. You could make different decisions about what kind of care is possible. But you can only make those choices if you actually know what's coming.
Building the Baseline
Start by establishing what your parent's situation is right now. You need to know what assets they have in total. You need to know what income comes in each month from all sources. You need to know what's going out each month in all categories.
Health status is the first variable. Is your parent still living independently in their own home? In assisted living where they get some help? In a nursing home? Health status determines what kind of care is needed and what it costs. According to the 2024 Genworth Cost of Care Survey, the national median cost for a private room in a nursing home is over $9,700 per month. Assisted living runs about $5,500 per month at the median. A home health aide costs roughly $33 per hour nationally. These numbers vary significantly by region, sometimes by a factor of two or three. Nursing home care in a rural area might be $5,000 per month. In an urban area on the coast, it might be $12,000 or more.
The second variable is what your parent wants and what your family can provide. Does your parent want to stay in their home as long as possible, even if it means paying for care at home? Does your family have capacity to help with care, or will all care need to be purchased from paid providers? Home care with family help costs less than home care with paid help. A nursing home costs more than either.
The third variable is geographic location. If your parent is likely to move to a different area, maybe closer to you or to a different state, you need to understand what care costs in the place they're moving to.
Running the Numbers for Different Time Horizons
Start with the three-year projection. What is the monthly income? What are the current monthly expenses? If you subtract expenses from income each month, how long will the savings last? If your parent's Social Security is three thousand per month and total expenses are three thousand per month and they have savings, then the savings are neither growing nor shrinking. That is sustainable indefinitely, assuming costs don't increase. If expenses are four thousand and income is three thousand, then savings are declining by one thousand per month. In three years, that is thirty-six thousand dollars gone.
Then project what happens if care costs increase. According to Genworth, long-term care costs have been increasing at roughly three to five percent per year nationally. If your parent is currently spending two thousand per month for care and that increases by four percent per year, in five years they're spending about $2,430 per month. That doesn't sound dramatic, but over five years, the cumulative difference adds up to tens of thousands of dollars beyond the current baseline.
Now add in health expenses: medications, doctor visits, hearing aids, walkers, incontinence supplies, wheelchair ramps, home modifications, hospital costs. For someone with chronic health conditions, these might add several hundred dollars per month. For someone with serious illness, they can be thousands per month.
So now you have a scenario. Your parent has two hundred thousand in savings, spending four thousand per month with income of three thousand. If things stay the same, savings last about fifty months, a little over four years. But if care costs increase by four percent per year and health costs increase because of declining health, savings might be depleted in three and a half years instead. Run the same projection with different assumptions. What if health stabilizes? What if costs increase faster because of a diagnosis? The point is not to predict the future. The point is to understand the range of possibilities.
Building a Strategy Based on What You See
If your projections suggest a decade or more of financial runway, the strategy is relatively simple. Monitor the situation regularly and revisit the projections if anything changes. You have time to think about options rather than scrambling.
If your projections suggest five to ten years of runway, you have time to plan but you need to start thinking seriously about what happens when savings are depleted. This is where Medicaid planning, downsizing, or insurance strategies become relevant. Maybe your parent can downsize housing to reduce costs. Maybe they can purchase long-term care insurance while they're still healthy enough to be insurable.
If your projections suggest crisis within two to three years, you need to act now. Waiting won't make it better. You might need to apply for Medicaid rather than waiting until savings are completely gone. You might need to make significant care arrangement changes. You might need to explore whether siblings can contribute financially.
Medicaid is often the most important part of this conversation. Medicaid is a needs-based program that pays for nursing home care or other care when someone's assets and income fall below state-specific thresholds. According to the CFPB, understanding Medicaid eligibility rules well before they become necessary gives families significantly more options for protecting assets. Different states have vastly different rules about protected assets, income limits, spousal protections, and resource limits. An elder law attorney in your state can help you understand the specific rules and plan the transition.
Putting the Plan on Paper and Getting Moving
Once you've done the projections and built a strategy, you need to implement it. This is where most families get stuck: they do the analysis but then don't take the next steps.
If your strategy involves preserving assets for Medicaid planning, start now. Waiting costs you time and money because spending patterns matter for Medicaid eligibility. If it involves getting your parent insured for long-term care, apply while they're still insurable. Insurance companies evaluate medical history and age when determining whether to issue a policy. Waiting a year or two makes a real difference. If it involves family conversations about who's going to help pay for care, have those conversations while you have time to plan, not when you're in crisis and everyone's emotional.
Document your projections and strategy in writing. You might create a simple written plan: "Based on current spending of four thousand per month and income of three thousand per month, Mom's savings will be depleted around 2028. At that point, she'll need to apply for Medicaid or we'll need to make care arrangement changes. To prepare, we'll consult an elder law attorney by end of year about Medicaid planning in our state." Then actually do those things. Make the attorney appointment. Have the conversation with your parent.
Share the plan with your parent if they're capable of understanding it. They might have thoughts about whether your assumptions are right. They might decide they'd prefer different care arrangements if it means financial stability. They might have resources you didn't know about.
Share the plan with siblings if they're going to be involved. Resentment often builds from believing that something could have been planned for but wasn't, or that one person is aware of problems while others are kept in the dark.
The projections won't be perfect. But imperfect projections are infinitely better than no projections and infinitely better than hoping the numbers work out.
Frequently Asked Questions
How do I find out what long-term care costs in my parent's area?
The Genworth Cost of Care Survey at genworth.com/aging-and-you/finances/cost-of-care.html provides median costs by state and metro area for nursing homes, assisted living, home health aides, and adult day care. Your local Area Agency on Aging can also provide estimates for your specific community.
What if my parent refuses to share financial information?
This is common and frustrating. You can start with what you can observe: the house, the car, whether bills seem to be paid. If your parent has a financial advisor or accountant, they may be willing to involve you if your parent gives permission. Sometimes framing it as "I want to make sure you're protected" works better than "I need to see your numbers."
Should I hire a financial advisor to do these projections?
If your parent has significant assets or a complicated financial picture, yes. A financial advisor who specializes in elder care planning can model scenarios that account for inflation, investment returns, tax implications, and Medicaid timing. For simpler situations, you can do a rough projection yourself using the method described in this article.
How fast do long-term care costs really increase?
According to Genworth's historical data, long-term care costs have increased between three and five percent annually over the past decade, depending on the type of care and region. That outpaces general inflation. Nursing home costs tend to increase faster than assisted living or home care costs.
What is the Medicaid look-back period?
In most states, Medicaid examines financial transactions from the prior five years (60 months) when determining eligibility. Gifts, transfers, or sales below market value during that period can result in a penalty period during which Medicaid will not pay for care. This is why planning well ahead of needing Medicaid matters so much.