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Americans planning for retirement often focus on replacing their paycheck, paying off the mortgage, and budgeting for Medicare premiums. But one of the largest potential expenses is also one of the hardest to predict: the cost of needing help with everyday activities late in life.

A Washington Post report highlights how rapidly rising elder-care costs are consuming retirement savings and reducing the amount families can pass on to their children.

The risk is not remote. The Department of Health and Human Services says approximately 70% of people turning 65 will use some form of long-term care during their lives. That can include help with bathing, dressing, eating, taking medications, or moving around the home.

The highest costs generally fall into three categories: housing, ordinary healthcare, and long-term care. Housing is often a retiree’s largest regular expense, while medical premiums, deductibles, prescriptions, dental work, and hearing care tend to become more important with age.

But long-term care can dwarf those routine expenses.

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What care costs now

The 2025 CareScout Cost of Care Survey found that the national median cost of a nonmedical caregiver providing 44 hours of help a week was $80,080 a year.

Assisted living reached a median of $6,200 a month, or $74,400 annually. A semiprivate nursing-home room costs $114,975 a year, while a private room costs $129,575.

Even adult day care, one of the less expensive options, had a median cost of $24,700 a year for care five days a week. Costs can be substantially higher in expensive metropolitan areas or when a patient needs round-the-clock assistance.

Those figures are in addition to the money retirees need for ordinary medical care. Fidelity has estimated that a 65-year-old retiring in 2026 would need about $185,500 to cover health expenses during retirement. That estimate does not include long-term care.

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Medicare has limits

Many retirees incorrectly assume Medicare will pick up the bill if they need extended help. Medicare may cover limited skilled nursing or rehabilitation following a qualifying hospital stay, but it generally does not cover long-term custodial care, such as ongoing help with bathing, dressing, and eating.

Medicaid pays for a significant share of the nation’s long-term care, but eligibility is generally limited by income and assets. That means middle-class retirees may have to spend down much of their savings before qualifying.

A 2026 Roosevelt Institute analysis found that wealth among middle-class adults begins declining more sharply two to four years before severe care needs appear and can continue falling for years afterward.

Among middle-class adults who eventually required significant care, median wealth fell from about $150,000 per person to approximately $65,000 eight years after the onset of care needs. Those who did not develop care needs ended the period with about $100,000 more in median assets.

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The inheritance squeeze

That drawdown has consequences beyond the retiree. Savings, investments, and home equity that might have become an inheritance are instead used to pay care providers.

The Roosevelt Institute found that higher-income households were generally able to absorb care expenses and recover financially. Middle- and lower-income households suffered more permanent losses, with expected inheritances falling around the time serious care needs developed.

Relying on relatives does not eliminate the financial damage; it can transfer it to the next generation. AARP reports that the country now has 63 million family caregivers. Half say caregiving has hurt them financially, and one-quarter have taken on debt.

Adult children who reduce their hours, turn down promotions, or leave work to care for a parent may lose current wages, retirement contributions, and future Social Security benefits.

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How to prepare

There is no single retirement number that works for every household. Someone who wants to leave money to heirs may need a larger reserve than someone planning only to cover routine living expenses.

Financial planners suggest considering several steps:

• Estimate local home-care, assisted-living, and nursing-home costs rather than relying only on national averages.
• Keep a separate health and long-term-care reserve in the retirement plan.
• Investigate long-term-care insurance while still healthy enough to qualify, carefully checking benefit limits, inflation protection, and premium terms.
• Consider whether the home could be sold or tapped for equity if care becomes necessary.
• Discuss care preferences with adult children before a crisis occurs.
• Review Medicaid, veterans’ benefits, and state long-term-care programs with a qualified adviser.

The central lesson is that planning only for an active, healthy retirement can leave a dangerous gap. For many families, the costliest stage of retirement comes near the end — and it can determine not only how securely a person ages, but whether anything remains for the next generation.