Investments | November 19, 2025
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As life expectancy rises and medical advances continue, more Americans will eventually face the need for extended care. According to data, seven in ten people over age 65 will require some form of extended-care services during their lifetime. It’s not only about healthcare—it’s about independence, dignity, financial security, and making thoughtful decisions ahead of time.
What Is Extended Care?
Extended care goes beyond short-term medical treatment—it covers a spectrum of medical and non-medical services for individuals with chronic illness, disability, or cognitive impairment.
These services may include:
- Assistance with Activities of Daily Living (ADLs) such as bathing, dressing, toileting, eating, and transferring.
- Skilled nursing care, therapy, home health aides, adult daycare, respite care, assisted living facility services, and nursing home care.
- Care may happen in the home, at a community facility, in assisted living, or in a skilled nursing facility.
And while aging is the most common trigger, it’s not exclusive to the elderly—some younger people may face such needs due to illness or accident.
Where Care Happens & What It Costs
Because extended care expenses can vary widely depending on where you live and the level of support needed, it’s helpful to understand the current national median costs for common types of care.
- In-home care / home health aide: Many people prefer aging in place, and the cost reflects the number of hours needed, caregiver certifications, and local labor rates — with the 2024 national median around $33 per hour for a home health aide.
- Assisted living facility (ALF): Assisted living communities offer housing and daily support while still promoting independence, and the 2024 national median cost is about $59,940 per year (roughly $4,995 per month) for a single-occupancy unit.
- Skilled nursing facility (nursing home): Skilled nursing facilities provide 24-hour medical care and higher levels of support, with the 2024 national median cost reaching approximately $127,750 per year for a private room.
These are national averages, and local costs can differ significantly based on the state, region, facility quality, level of care required, and ongoing inflation.
Learn More:
Get up-to-date national and state cost comparisons for long-term care through the Genworth Cost of Care Survey.
How to Create Your Extended Care Plan
Here are key steps to develop a robust extended care plan.
1. Understand Your Risk Profile
- Age, health status, family health history, lifestyle, and cognitive risk all influence the likelihood and timing of need.
- Consider local cost trends for care in your region.
2. Estimate Expected Costs
- Use national and regional averages as starting points; adjust for inflation (care costs have historically risen faster than general inflation).
- Project for in-home care, assisted living, and nursing home scenarios.
- Factor in elimination periods, inflation adjustments (if using insurance), and facility selection.
3. Review You Assets and Funding Sources
- Retirement accounts, savings, home equity, and family support.
- Insurance policies (health, Medicare/Medicaid eligibility), veteran benefits.
- Discuss options with your financial advisor.
4. Choose Your Approach
There are two main pathways when planning for extended-care needs:
- Self-insure: Rely on your savings, investments, retirement assets, home equity, or family support. While this gives flexibility, it also means you bear the full risk of rising costs and care needs.
- Insurance or hybrid strategies: Purchase a long-term care (LTC) policy or an extended care insurance product. These can help protect assets, preserve independence, shift risk, and provide peace of mind.
Your strategy should reflect your values, health status, risk tolerance, family dynamics, and financial situation.
5. Integrate with Other Planning
- Estate planning: powers of attorney, living wills, trusts.
- Retirement planning: care needs impact asset drawdown, required minimum distributions, and portfolio stress tests.
- Family dynamics: discuss wishes early, designate decision-makers, and set expectations.
6. Review and Adjust
- Reassess every few years, especially when there are major life events (health changes, divorce, relocation, inheritance).
- Monitor care cost inflation, policy changes, and state benefit programs.
Why Extended Care Planning Matters for You and Your Loved Ones
Extended care planning is a crucial but often overlooked part of retirement and family financial strategy. When you understand what extended care is, what it may cost, and the strategies available to you, you can move into the future with greater confidence and control. Having a plan in place also helps prevent rushed decisions during stressful moments and provides peace of mind for everyone involved.
If you’d like help building an extended care strategy that fits your retirement and family goals, connect with a Financial Advisor at Forward Investment Services.