How much should you set aside for long-term care if you're planning to self-fund your expenses? It's one of those questions that quietly haunts even the most financially secure retirees. For decades, insurance seemed like the obvious safety net—a way to transfer the risk of aging into something a premium could solve. But over time, reality disrupted that neat narrative. Insurance premiums have surged dramatically, insurers have pulled out of the market, and coverage terms have grown less generous. What once appeared to be a responsible financial move has become an increasingly tough sell.
Instead, many high-net-worth individuals have chosen to take control into their own hands, banking on robust investment portfolios and rising asset values to cover long-term care when the time comes. It seems straightforward: grow your wealth, use it later. But how much is enough? That depends on many moving pieces, and some of them are far more elusive than most people realize.
Imagine this: You’re a retired executive living in a coastal Connecticut estate with your partner. You’ve invested wisely, you have no mortgage, and your children are financially independent. But then your spouse has a fall. Suddenly, you're faced with the reality of bringing in daily care or even transitioning to a facility—not in some distant future, but now. In-home care initially feels like the more humane option. After all, this is your sanctuary. Yet the costs add up with astonishing speed. At $34 per hour, even part-time assistance becomes a five-figure monthly expense. Round-the-clock care? Now you're looking at nearly $300,000 a year, and that doesn't include household expenses like insurance, taxes, and maintenance.
This is where the real conversation begins. Most people equate in-home care with independence, comfort, and control. But those very benefits can carry a luxury price tag. Unlike institutional care, where room and board are bundled, staying at home means you’re layering care costs on top of everything else—property taxes in high-cost areas, utilities, possibly even private chef or home manager services. The higher your lifestyle expectations, the higher the burn rate when care is needed.
Let’s say you're a retired couple living in a San Francisco Victorian you bought in the early 80s. It’s worth over $4 million now, and while you enjoy the equity on paper, you’re also paying nearly $30,000 a year in property taxes. If one of you requires help preparing meals, dressing, and bathing, even light assistance at seven hours per day will push your annual costs north of $100,000—and that’s before medical supplies, specialty diets, or unexpected modifications to the home. Care doesn’t arrive in a neat package. It creeps in, expands, and eventually defines the rhythm of your days.
Then there’s the unpredictable progression of need. Very few people go from full independence to full dependence overnight. It usually begins with small things: forgetting a medication here or there, no longer driving at night, or needing help with the stairs. Those small things accumulate. A friend in Palm Beach recently described watching his father go from part-time assistance to full-time live-in care in under eighteen months. At first, they paid for a few hours a day, which seemed manageable. But as mobility declined, so did the number of hours they had to cover. Eventually, they moved to 24-hour care. By year two, costs had topped $250,000 annually—and they were still living in the same home, paying the same mortgage and utilities.
This creeping nature of need makes budgeting particularly tricky. You can estimate average costs based on national data—the Genworth Cost of Care study is a popular resource—but averages don’t reflect the reality of geographic disparities. A private room in a nursing home in rural Idaho might cost under $80,000, while a similar room in Manhattan can exceed $180,000. If you plan to age in place in a major urban center or resort community, your estimates must reflect those elevated realities. Assuming the national average could leave you badly underprepared.
Even within the same city, options can vary widely. Boutique assisted living facilities with fine dining, concierge service, and private fitness instruction cater to a clientele used to a certain standard of living. And for many of those clients, moving into a sterile or institutional setting simply isn’t on the table. This emotional commitment to in-home or high-end care must be matched with a financial strategy that accounts for its premium cost.
A growing number of affluent families are quietly establishing long-term care reserves within their investment portfolios. Some earmark a fixed percentage of their retirement funds for care-related expenses, often in a separate conservative allocation, like municipal bond ladders or short-duration treasury funds. Others take a more insurance-adjacent approach, using hybrid long-term care annuities or life insurance policies with riders that allow for care disbursement. These are not perfect solutions, but they reflect a broader understanding: care is a certainty for many, and the earlier you plan for its nuances, the more freedom you preserve for your future self.
Consider the story of a retired physician couple in Denver. Both in their early 70s, they built a care plan into their estate strategy. Their advisor encouraged them to set aside $750,000 specifically for care, held in a low-volatility account. While they hope not to need the full amount, they’ve acknowledged that either one of them could face a long-term illness or injury. In their view, this isn’t just about self-protection—it’s about protecting their adult children from having to scramble for answers during a crisis.
Communication plays a central role here. One of the biggest mistakes families make is delaying conversations about preferences and affordability. No one wants to think about aging, much less dependency, but articulating a plan while you’re healthy is one of the most empowering financial decisions you can make. Whether it’s specifying the desire to remain at home at all costs or identifying a preferred facility, clarity now prevents chaos later.
High-net-worth individuals often face another dilemma: the desire to preserve a legacy while also funding a potentially extravagant care need. Balancing bequests with long-term care realities requires trade-offs. You may find yourself rethinking gifting strategies, pausing on early inheritance plans, or adjusting the expected size of philanthropic contributions. It's not just about affording care—it's about the shape and size of the life you want to live while receiving it.
There is no single formula, but a realistic starting point is to prepare for at least three years of moderate to high-cost care. For those intending to stay home, doubling that figure may be prudent. If you anticipate $120,000 annually for care, for example, setting aside $360,000–$700,000 could offer a meaningful cushion. If your lifestyle includes multiple properties, personal staff, or luxury healthcare concierge services, your needs may stretch far beyond that.
Inflation is another variable that shouldn't be underestimated. While broader consumer inflation may ease or spike over time, healthcare and elder services have a stubborn tendency to outpace other sectors. Planning based on today's prices could mean a sizable gap ten or fifteen years from now. Building in an inflation-adjusted cushion isn't a luxury—it's a necessity.
So where does that leave you? Ideally, not in a place of fear, but of intentional design. The costs are steep, yes, but they reflect a society that increasingly values personalized, dignified care. If you have the resources, directing them toward your comfort and autonomy in later life is arguably one of the most meaningful ways to spend your money. After all, wealth isn't just about accumulation. It's about what that wealth can give back to you when you need it most š”.