Stress-testing a long-term-care need

The risk most plans never look at

Long-term care — help with daily living at home, assisted living, or a nursing facility — is the single biggest expense most retirement plans never model. Roughly half of retirees end up needing some. A semi-private facility room commonly runs $6,000–9,000 a month, and care costs have risen faster than general inflation for decades. Two or three years of care can cost more than a decade of ordinary living expenses.

A plan that says "on track" without ever asking this question is answering an easier question than the one that matters. This toggle lets you ask it.

How to turn it on

Go to My Plan → Profile & assumptions in the app and tick Stress-test a long-term-care need. Three fields appear:

• Starting at age — when the care need begins. Default 85, a typical age for needing significant help.
• Years of care — how long it lasts. Default 3, near the average for those who need paid care.
• Cost per month — in today's dollars. Default $6,000; use a higher figure if you'd want a private room or live in an expensive area.

The app adds that cost to your expenses for those years, grown at healthcare inflation (5% a year) rather than general inflation — because that's what care costs actually do. In a couple's plan, each person who reaches the care window adds their own cost; with survivor modeling on, a spouse who has already passed away doesn't.

Reading the result

Open the projection and look at the years you chose — you'll see a Long-term care (est.) line in the month detail. Then look at the run-out date and ending balance:

• Plan still lasts? Good — your plan can self-insure a typical care event. That's genuinely worth knowing.
• Plan now runs out? You've learned something important while there's still time to act on it. The usual options people weigh: long-term-care insurance (cheaper to buy in your 50s and 60s), earmarking a specific account or the home's value as the "care fund", or planning around family care for the early years.

What this doesn't model

This is a deliberate, simple stress test — not a prediction of your health. It doesn't estimate your probability of needing care, model Medicaid, or price insurance policies. It answers one question well: if a typical care need arrives, does the money hold? An educational estimate, not financial or medical advice.