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Where you retire & your wallet: The varying cost of long-term care

Where you retire & your wallet: The varying cost of long-term care

July 19, 2021

You’re no doubt aware that cost of living is a major concern when you’re contemplating a place to retire. Indeed, housing expenses, taxes, and even grocery bills can vary dramatically depending on where you reside, which impacts your ability to make ends meet.

Many seniors who are looking to relocate, however, forget to factor in the local cost of long term care, which can become a factor if they require home health aides, nursing home care, adult day care, assisted living or residential care services down the road. Nursing home stays in a high priced state like New York, for example, can cost twice what they do in a lower cost part of the country like Louisiana – or more.

The median annual cost of a semi-private room at a nursing home in New York was roughly $147,825 in 2020, according to Genworth Financial. In Louisiana, it costs about $66,430. Similarly, home health aides cost about $66,352 per year in North Dakota versus $54,798 in Ohio.1

“The cost of long term care can be very different in one state than it is in another,” said Clinton Rhodes, a financial professional with Sagepoint Financial in Midlothian, Virginia, noting retirement plan projections should take long term care expenses into account.

The price tag, of course, isn’t everything. There’s also quality of care to consider. Your living expenses and long term-care costs, for example, might be higher in bigger cities, but you may also have a wider variety of services and facilities from which to choose. Also, you may be closer to medical specialists and world-class hospitals if you need them.

To help consumers compare information on quality of care and staffing for the more than 15,000 Medicare- and Medicaid-participating nursing homes across the country, created the Nursing Home Compare online tool.

Proximity to friends and family is yet another factor. You may want an adult child or another designated loved one to play an active role in managing your long term care. Thus, securing a room at the country’s premier assisted living facility may not make sense if your kids and grandkids live thousands of miles away.

The balancing act

To determine how long-term care costs could impact them, and which options best meet their needs, most retirees must roll up their sleeves.

First, take stock of your financial picture — your savings, assets and guaranteed sources of income, including benefits you receive from Social Security and any annuities or pensions you may have. Then, estimate your monthly expenses, factoring in the cost of living and long-term care fees in the locations you are considering moving to during your golden years. offers a cost of living calculator to help determine how your disposable income will be affected by a relocation between any combination of 300-plus U.S. cities.

Don’t forget to factor in healthcare costs, which generally increase with age.

Fidelity Investments projects that a 65-year old couple retiring in 2021 would need an estimated $300,000 to cover health care costs in retirement, above and beyond their Medicare coverage. That estimate does not include other health-related costs such as long-term care, over the counter medications and most dental services.

Armed with cost of living data and a firm grip on your retirement savings and income, you should be better positioned to assess which of your potential retirement destinations are realistic – and more importantly, which are not.

Rhodes said relocation decisions should always be guided by research and careful budgeting. “You have to create a budget and ensure you are going to have enough money to live on,” he said.

Indeed, many financial professionals recommend retirees do a test run, and live off the money they expect to generate from their savings and sources of income. They should also visit destinations they’re considering, including specific retirement communities and neighborhoods. Weigh not just the costs, but the political and social environment, as well. After all, you want to spend your days with people whose company you enjoy.

Another tip? Consider renting for a year or two in a new location before you buy, which provides flexibility to alter your plan if it turns out the palm trees don’t make up for the lack of grandkids nearby.

If you can’t afford your first choice location, you may need to adjust your plan. Either cast a wider net, consider working longer to augment your savings, or commit to a scaled back lifestyle. Ask yourself, too, what trade-offs you would be willing to make should you ever require long term care: would you be comfortable in a basic nursing facility if it meant you could live in a more desirable city that’s closer to your family and friends?

To help cover the cost of long term care and protect your assets from being drained, you might also consider purchasing long term care insurance or hybrid life insurance policies that offer long term care benefits, which could help cover your expenses and protect your assets from being used to pay for care, should the need arise.

The right place is out there

For many seniors, retirement is an opportunity to live where they’ve always dreamed of, but couldn’t do so while working or raising a family. With a little advance planning and careful research, you may be able to strike the right balance between cost of living, quality of care, and optimal lifestyle, for a secure and satisfying retirement.

1 Genworth, “2020 Cost of Care Survey, Home Health Aids based on 44 hours per week by 52 weeks”.

2 Fidelity Investments, “Fidelity Retiree Health Care Cost Estimate,” 2017

Provided by Shelly Gigante, courtesy of Massachusetts Mutual Life Insurance Company (MassMutual). 

©2021 Massachusetts Mutual Life Insurance Company, Springfield, MA 01111-0001