Most Americans expect to need long-term care but few are financially ready

As Americans live longer, most see long-term care as a near certainty in their future, but few are preparing for it financially, a new study reveals.  

Northwestern Mutual’s 2025 Planning & Progress Study finds that 61% of adults expect to experience a long-term care event and nearly three-quarters say they’d prefer to receive care in their own home rather than move to a facility.

While the desire to age in place cuts across age, race, gender, and income, financial readiness lags behind. Only 42% of Boomers+ and 35% of Gen Xers have a plan in place to pay for potential LTC needs, the study found. And just 32% have considered the costs of caring for someone else.

“Long-term care is a common financial blind spot – something that individuals and families think they can deal with in the moment if it happens,” says Kamilah Williams-Kemp, chief product officer at Northwestern Mutual. “The truth is this: long-term care events happen frequently, and if people plan proactively, they will have more good options for care to choose from. This is where a trusted financial advisor is absolutely critical.”

The price of care could soon make those preferences difficult to afford. A 2024 Illumifin study cited in the report shows that hiring a home health aide for eight hours per day currently costs around $96,000 annually. If prices grow at 5% per year, expenses could exceed $500,000 annually by the late 2050s, well within the horizon for many of today’s working adults.

While many people still assume health insurance or Medicare will foot the bill, these programs typically cover only medical treatment and short-term rehabilitation, not ongoing personal care or assistance with daily living.

“Planning ahead for long-term care can help people age gracefully according to their wishes, protect loved ones from having to make difficult decisions, and safeguard the legacy they hope to leave behind,” Williams-Kemp added. “That’s why a comprehensive financial plan is so critical.”

READ: Advisors see long-term care as critical piece of retirement planning

The study found that one in five adults currently provides care for someone, including 28% of Gen Z and 27% of Millennials. Nearly three in ten (28%) have been caregivers in the past.

Many current and former caregivers report cutting spending (36%), tapping personal savings (25%), or taking on additional work (23%) to make ends meet. Some even delay debt payments or draw from retirement funds to keep up.

“Caregiving is one of the most selfless acts – but it can take an emotional, physical and financial toll,” said Williams-Kemp. “Through proactive planning, people can shield their loved ones from having to shoulder the full financial weight of a long-term care event. Done well, proactive planning can help to free families from financial anxiety and enable them to focus their attention on their loved ones.”

The 2025 Planning & Progress Study was conducted by The Harris Poll for Northwestern Mutual, surveying 4,626 U.S. adults in January 2025, including nearly 1,000 high-net-worth respondents.