New Study Sets Baseline for Long-Term Care Costs, With Big Gaps By Gender and Where You Live
As aging populations reshape retirement planning, a fresh Milliman analysis released this week sets a concrete benchmark for long-term care planning. The study finds 65-year-olds need a starting point of about $135,000 to cover high-intensity long-term care costs in the years ahead. The finding arrives amid rising costs for health services and living expenses, a backdrop that matters for homeowners and lenders alike.
Milliman’s researchers say the number is an average, not a rule. The same study highlights sharp differences by gender, location, and health status. In a market where loans tied to home equity are a growing option for retirees, those variations can dramatically alter risk profiles for lenders and the planning calculus for families.
“This is a wake-up call for planners and lenders,” said a Milliman senior analyst in a statement accompanying the release. “The cost curve for long-term care isn’t flat, and the path varies with life expectancy and the type of care needed.”
The findings were discussed in a briefing this week and are expected to influence conversations around retirement planning, reverse mortgages, and other home equity-based lending strategies used by seniors facing aging-in-place constraints or declining health.
Where the Numbers Break Down The Most
The headline figure of $135,000 is an average for high-intensity long-term care, which includes skilled nursing, prolonged residential care, and related services. Yet the picture changes dramatically when you split it by gender.
- Gender gap: Men average about $98,000, while women average roughly $171,000 for lifetime high-intensity care, a gap driven by longer female life expectancy and the likelihood of needing extended support years past the typical male retirement horizon.
- Lifetime risk: The analysis estimates that nearly half of men and 40% of women may not require any paid long-term care at all. About one-quarter of men will need less than a year of paid care, leaving 29% whose needs extend beyond a year.
The report also delves into women’s longer tails for care needs, noting that about 41% of women may require more than a year of care, and 14% could require five years or more. Those long-term trajectories can multiply costs, with some estimates in the broader literature approaching hundreds of thousands of dollars if extended care is needed.
Geography and Care Type Drive The Real-World Cost
Where you live interacts with how care is delivered and priced. The Milliman study points to a clear geographic spread in life expectancy and care duration, which translates into different financial needs for long-term care planning.
- Longer-lived states: Hawaii, California, Washington, Florida and New Hampshire tend to show longer lifespans, raising the probability of longer care durations and higher cumulative costs over a lifetime.
- Shorter-lived states: Mississippi, Alabama, West Virginia, Louisiana and Kentucky skew toward shorter lifespans, which can reduce the probability of extended paid care but not erase it for all residents.
Beyond geography, the type of care—home health, assisted living, or nursing home—heavily shapes total billings. Healthier residents generally face shorter care durations, while those with chronic conditions or late-life health events may see longer, more expensive care episodes.
Analysts emphasize that these geographic and care-type differences matter for how financial products are priced and marketed in retirement planning. For loan officers and lenders who work with seniors, the tail risks around extended care can affect both pricing and underwriting decisions.
What This Means For Loans And Home Equity Plans
The rising cost of long-term care has become a practical consideration for home equity lenders. When borrowers tap reverse mortgages or other equity-based products, lenders evaluate the risk of future health-related expense that could influence repayment ability or loan-to-value limits.
Industry observers say the study’s numbers should push lenders to incorporate robust risk buffers and scenario planning into product design. In a time of higher interest rates and tighter credit standards, the ability to model different care-cost trajectories can help products remain accessible while protecting balance sheets.
One lender executive, speaking on condition of anonymity, said: “These figures aren’t just about a one-time cost. They map out potential life-long obligations that could alter asset depletion and loan performance years down the line.”
Financial advisors are also likely to use the data to guide clients toward diversified planning—combining savings, insurance, and loan options to hedge against long-term care risks. The core message from the study is that ambiguity in aging costs should be replaced with concrete savings targets and a clear, actionable plan for accessing funds when needed.
Market Context: Inflation, Demographics, And The Lending Landscape
The Milliman findings arrive as inflation remains a global issue and care costs continue to outpace general price growth. For retirees relying on fixed incomes, even moderate price increases can shift the affordability of care dramatically over a decade or two. Demographically, the U.S. is aging rapidly, with the first of the baby-boom generation already entering their 80s and 90s in sizable numbers.
From a lending perspective, this creates a double-edged sword: more potential borrowers may need help with care costs, but lenders face higher credit risk if long-term care needs extend beyond expectations. The study’s emphasis on gender and regional differences gives lenders concrete variables to test in pricing models and capital planning.
Financial markets have shown sensitivity to healthcare costs and aging-related spending, with health care inflation often outpacing broad CPI. Investors and lenders alike should watch how policymakers address long-term care funding, as changes to Medicaid, private insurance coverage, or tax incentives could reshape consumer behavior and demand for home equity products.
Next Steps: How Households Can Use The New Data
For households approaching retirement, the study offers a clear call to action: start planning for long-term care early, diversify potential funding sources, and consider adding reserve funds or insurance protections to mitigate future spikes in care costs. Even if the likelihood of needing extensive paid care isn’t high for every individual, the potential financial impact is large enough to warrant attention.
Financial professionals expect more granular analysis in the months ahead, including state-by-state cost trends and updated projections aligned with inflation. If lawmakers adjust long-term care subsidies or public programs, the cost estimates could shift accordingly, underscoring the importance of ongoing review of retirement plans and loan strategies.
Bottom Line for Investors and Lenders
The central takeaway from the latest study is simple: long-term care costs are real, and they vary in meaningful ways that affect both planning and lending. The average figure of $135,000 for high-intensity care is a benchmark, not a ceiling, and the spread across genders and geographies means there is no one-size-fits-all answer.
As households grapple with rising prices and uncertain health needs, lenders and advisors will likely lean more on scenario testing, customized product designs, and longer-term financial planning. The study finds 65-year-olds need to be viewed through a nuanced lens—not just as a statistic but as a road map for personalized retirement and loan planning in 2026 and beyond.
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