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Not as Ready as We May Think: The Hidden Costs of Aging for Retirees
Long-term services and supports represent a significant financial burden on the American retirement system.

Imagine you’ve spent your entire adult life saving for retirement, only to realize once you get there that you haven’t saved enough. This is a common fear—58% of retirement savers say outliving their assets is their greatest concern about retirement.1
There’s no shortage of advice on building your retirement savings. But far less guidance exists on what to do when something like injury or illness drains them.
The US population is aging, and as we live longer, the need for long-term healthcare—also known as long-term services and support (LTSS)—is increasing. Much as we might prefer not to think about it, there’s a real possibility that our health could decline in retirement—something worth preparing for. Our recent study found that the probability of needing LTSS in retirement can be as high as 60% for certain individuals with longer lifespans.2
These LTSS costs can be substantial. Services such as in-home care, assisted living, or nursing home facilities can cost thousands of dollars per month—an expense that can derail even the best-laid retirement plans.
One Moment Can Change Everything
Consider Diane, a hypothetical single, 70-year-old retiree. As she transitioned from her career into retirement five years ago, she made plans for exactly what she’d like to do in this new chapter of her life. As someone who didn’t have much opportunity to travel during her working life, she prioritized traveling the world over the first five years of retirement. Now at 70, she’s planning a big trip out West to see the Grand Canyon with her lifelong friends. She also started auditing classes at the local university, as well as going to see her grandchildren who live three hours away at least once a month.
Diane’s been saving and investing steadily since her twenties, leading her to feel reasonably assured in her retirement preparedness. But everything changed one morning when Diane slipped in the shower and broke her hip—causing her healthcare costs to suddenly skyrocket as a result of her injury. Medicare covered her initial hospital stay and a stint at an inpatient rehab facility, but Diane's broken hip wasn’t just a temporary setback. It was the beginning of a costly new chapter, one that would put a damper on her retirement dreams.
Once she completed rehab, she still needed months of physical therapy, as well as assistance from a home health aide for certain activities like bathing and housekeeping. She also had to make modifications to her home to avoid future injuries, such as installing a safety rail and shower seat in her bathroom. What she didn't realize before the injury was that Medicare wouldn’t cover these expenses. The long-term support—tens of thousands of dollars—had to come from her own pocket.
The Price of Care
Diane is far from alone. According to our research, Americans may be far less prepared for retirement than they think once the cost of LTSS is factored in. This effect was especially true for people like Diane—more than half (52%) of single women were projected to run short of money with LTSS costs compared to 34% without.3 But this problem appears to be universal: the risk increases from 22% to 37% among couples, 23% to 36% for single men, and 26% to 41% for all groups combined.4
These findings suggest that LTSS costs could significantly undermine retirement preparedness for Americans across the board, turning what may seem like a stable financial plan into one that just doesn't hold up when care is needed most. For Diane, this means her trip to the Grand Canyon must be put on pause—maybe indefinitely. She might have to make fewer trips to see her grandkids, and she may have to forget about those classes she wants to audit. Instead, her retirement funds are put to work paying off the LTSS costs she’s racked up through no real fault of her own.
Of course, some retirees may not need LTSS at all—but for those who do, the out-of-pocket expenses can be staggering. On average, single women who face LTSS costs may spend around $248,000.5 For single men, that number can be $186,0006 while couples may face an average of $251,000 if care is required.7
Bridging the Retirement Readiness Gap
These findings show that LTSS costs could pose a significant financial challenge to American retirement savers—one that many of them simply aren’t prepared for. Some may mistakenly believe Medicare covers most long-term care, while others assume they won’t need it at all. But for many, these costs can strain even well-planned retirements, so it's important to start factoring them into any realistic retirement strategy.
But should retirement savers navigate this challenge on their own? Realistically, addressing the effects of LTSS costs on retirees will likely require action on multiple fronts. Private long-term care insurance may help some households manage the risk, but broader initiatives, like the WISH Act—a recent bipartisan Congressional proposal for a national long-term care insurance program—could play a critical role in easing future retirees’ financial burdens. In upcoming research, we plan to analyze the potential effectiveness of these interventions.
Meanwhile, retirement plan participants, advisors, and plan sponsors can take meaningful steps to bolster their retirement strategies against the threat of high LTSS costs. This starts with education: understanding the potential financial burden of LTSS, knowing what Medicare does and does not cover, and exploring private insurance options. Retirement service providers, such as advisors and recordkeepers, can take steps to factor LTSS costs into the guidance they offer.
While no one can predict if or when they’ll need long-term care, planning for the possibility could make all the difference.
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1. Cerulli Edge, Retirement Edition, Q2, 2023.
2. Look, Spencer and Jack VanDerhei, “The Overlooked Cost: The Impact of Long-Term Services and Supports on Retirement Income Adequacy,” Morningstar Retirement, 2025. https://www.morningstar.com/business/insights/research/ltss. Note, the 60% metric listed here was specifically found for women at age 95.
3. Ibid.
4. Ibid.
5. Ibid. This number reflects what’s known as a “conditional average,” which only considers the average of those who incurred LTSS costs. The “unconditional average” cost—that is, an average that includes even those who had $0 in LTSS costs—was $116,000.
6. Ibid. The unconditional average for single men is $71,000.
7. Ibid. The unconditional average for couples is $158,000.
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