- Long-term care
- Ongoing help with daily activities such as bathing, dressing, eating or moving around, needed because of chronic illness, disability or cognitive decline. It can be provided at home, in assisted living or in a nursing home. Costs vary widely by location and setting, which is why this calculator starts from your own estimate of today’s annual cost.
- Care cost inflation
- The yearly rate at which long-term care prices rise. Historically it has run faster than general inflation, largely because care is labor-intensive. The calculator compounds today’s cost at this rate until care begins and through each year of care, so small changes in the rate produce large changes over long horizons.
- Future annual cost
- What one year of care is projected to cost in the year care begins, found by growing today’s annual cost at the care inflation rate for the years until care is needed. For example, $60,000 growing at 4% for 25 years reaches roughly $160,000. It is a projection, not a quote from any provider.
- Total future care cost
- The sum of projected annual costs across every year of care, with each year inflated further than the last. It is the total amount you would need to pay for the full expected duration of care, before counting savings, insurance benefits or public programs. It is stated in future dollars, not today’s dollars.
- Funding gap
- The total future care cost minus the savings you have set aside. It shows how much would still need to come from other sources, such as income, insurance, family help or public programs. This calculator does not grow your savings with investment returns, so the gap is conservative if the money stays invested.
- Care duration
- The number of years you expect to need paid care. This calculator’s own guidance puts the U.S. average at around three years, but individual needs range from a few months to many years. Because total cost scales almost directly with duration, testing a longer period is a sensible way to see the downside.
- Assisted living
- A residential setting that provides housing, meals and help with daily activities, with less medical care than a nursing home. It usually costs less than nursing-home care and more than occasional home care. Enter the annual cost of the setting you expect, since the calculator uses a single cost level for every year of care.
- Nursing home
- A facility that provides round-the-clock skilled nursing care, supervision and help with daily activities. It is generally the most expensive long-term care setting. Health insurance and Medicare typically cover little or no long-term custodial care, so these costs are usually paid from savings, long-term care insurance or, after assets are spent down, Medicaid.
- Long-term care insurance
- A policy that pays a set daily or monthly benefit toward care once you can no longer perform certain daily activities, usually after a waiting period. Premiums rise with age at purchase. This calculator does not include insurance benefits, so any expected coverage would reduce the funding gap it shows.