Millionaires Should Have Long-Term Care Insurance

You've worked hard, saved consistently and made smart decisions along the way. Maybe you maxed out your 401(k) contributions for years. Maybe you bought a home that appreciated significantly. Maybe you invested steadily and let compound interest do its job. Add it all up — retirement accounts, home equity, taxable investments, savings — and you might be closer to a million dollars than you realize.

In fact, you may already be there.

More Americans are reaching millionaire status than at any point in history — and much of that wealth was built one paycheck at a time. The number of 401(k) millionaires jumped 27 percent in 2024, rising to 537,000 from 422,000, according to Fidelity Investments' Q4 2024 retirement analysis. IRA millionaires grew as well, increasing 8 percent to more than 344,000. That figure has nearly tripled since 2019, when only 233,000 401(k) millionaires existed on Fidelity's platform. 

Employer-sponsored retirement plans made that growth possible. The average 401(k) millionaire is 59 years old and has been contributing to the same plan for an average of 26 years — proof that steady, disciplined saving over time is the real engine behind millionaire-level wealth.

"Retirement savers experienced several quarters in a row of upward growth, with account balances making significant gains over the course of 2024. We are pleased to see so many individuals begin 2025 with a strong financial foundation and the savings behaviors in place that will help them better navigate what may come in the year ahead." Fidelity Investments Q4 2024 Retirement Analysis, February 27, 2025 —  Sharon Brovelli, president of Workplace Investing at Fidelity Investments.

That momentum has only continued. By the end of 2025, the number of 401(k) millionaires at Fidelity climbed to 665,000 — up from 654,000 the prior quarter — with average 401(k) balances reaching $146,400 at year-end, an increase of more than 11 percent from the previous year. Vanguard reported similar gains, with average participant account balances rising 13 percent in 2025 to a record $167,970 — the third straight year of double-digit balance growth. 

Even during periods of market volatility, most savers held steady. "Even during periods of turbulence, the majority of savers are wisely making the decision to stay the course and not make sudden changes to their retirement investments," Brovelli said. "This diligence and focus on long-term retirement goals contributed to this quarter's retirement balance rebound."

Rising home values have added to household balance sheets as well. Add your home equity to your retirement accounts and taxable savings, and you may be closer to a million dollars than you think.

One in 10 American households will be worth at least $1 million within the next four years, according to Jesse Slome, director of the American Association for Long-Term Care Insurance (AALTCI). His message to those families is clear: protecting that milestone requires a plan.

Achieving this milestone is historic for millions of Americans, and their number one priority will be protecting that achievement," — Jesse Slome.

That's exactly where most high-net-worth families have a blind spot.

Reaching a million dollars takes decades of discipline. Losing a significant portion of it can happen in just a few years — sometimes less — if a long-term care need goes unplanned. A single extended care event, whether it's a stroke, a Parkinson's diagnosis or advancing dementia, can generate costs that outpace what even a well-funded retirement account can absorb.

That's not a scare tactic. It's math.

The good news is that protecting your wealth from this risk is more straightforward — and more affordable — than most people expect. But it requires planning before you need care, not after.

A Million Dollars Doesn't Go As Far As It Used To

Inflation has quietly eroded the purchasing power of a million dollars. If you retired today at 65 with $1 million and no Social Security income, you could spend roughly $40,000 to $45,000 per year — and run out of money within 25 years.

That math gets worse fast if long-term care enters the picture. If is the wrong word as the United States Department of Health and Human Services data says if you reach the age of 65 you have a 56% chance of needing help with daily living activities or supervisiond ue to dementia. 

What Long-Term Care Actually Costs

Care costs vary by location, but national medians are sobering. According to the LTC News Cost of Long-Term Care Calculator, here are the 2026 median annual figures:

• In-Home Health Aide (44 hrs./wk.): $68,076
• Adult Day Care (5 days/wk.): $23,160
• Assisted Living — base cost (one bedroom): $60,060
• Memory Care: $68,676
• Nursing Home (semi-private room): $129,888

Even a single year of nursing home care could consume more than 10 percent of a million-dollar nest egg. A multi-year need — which is common — can devastate even the most carefully built retirement plan. If you live in a high cost area, like New York, Chicago, Los Angeles, San Franicsco, etc, these extended care costs will be even higher.

Long-Term Care Is the Biggest Risk You're Not Planning For

Medical advances mean more Americans are living longer. That longevity is a gift — but it comes with financial exposure most retirement plans overlook.

Individuals who have worked hard and saved throughout their life understand the risks that could impact their net worth, long-term care being the greatest risk as they age. What they don't know is how easy and affordable it can be to mitigate that risk." — Jesse Slome.

By your 60s, many people begin experiencing some level of cognitive decline. As that progresses, supervision and structured care often become necessary — at costs your savings absorb directly, unless you have coverage.

Hidden Burden on Your Family

Most people don't want to become dependent on their spouse or adult children. That's understandable — and realistic. Spouses often face their own health challenges. Adult children carry careers, mortgages and families of their own.

Caregiving is physically and emotionally draining. Siblings frequently disagree about who takes responsibility. As Jessica Conway Church and Shane Eleanor Conway McCoin write in their blog "Losing a Puzzle Piece," caregiving involves "harsh realities, stress, and much hardship."

Long-Term Care Insurance pays for care in any setting — your home, adult day care, assisted living, memory care or a nursing home — and typically includes case management services. That gives your family the freedom to be family, not your care coordinator.

Why Millionaires Buy Long-Term Care Insurance

You might assume that having significant assets means you can self-fund care. Many financial planners and Charles Schwab agree: without LTC Insurance, extended care expenses can quickly deplete your nest egg.

There's also a tax dimension. If you or your family must sell stocks, bonds or other assets to cover care costs, those liquidations often trigger capital gains. Farmers face this especially — land worth millions may need to be sold to fund care. An LTC policy can prevent that outcome entirely.

For estates over $10 million, policies with unlimited benefits offer total asset protection. Options with linked death benefits are also available. A qualified Long-Term Care Insurance specialist can help you find the right structure based on your age, health, financial situation and family history.

Partnership LTC Insurance Adds Another Layer

Most states offer Partnership Long-Term Care policies. These plans provide dollar-for-dollar asset protection beyond the standard benefit, giving your estate additional shelter from care costs. For example, if your LTC policy pays $1,000,000 in benefits and you exhaust all yoru benefits, you can legally shelter an equal amount of assets and still qualify for Medicaid. Learn more about Partnership Long-Term Care plans through the LTC News Long-Term Care Education Center.

Protecting More Than Your Money

Most people who work hard to build wealth share a common goal: they want to protect what they've earned. But if you ask most families what they fear most about aging, money is rarely the first answer. It's watching a spouse burn out. It's seeing an adult child put their career on hold. It's siblings arguing over who does what and when. It's the guilt, the grief and the exhaustion that come with caring for someone you love — often while trying to manage a crisis no one planned for.

Long-term care doesn't just drain bank accounts. It disrupts families.

No matter how much you've saved, the people who love you will be the ones who show up when you need care. And without a plan in place, showing up often means dropping everything — careers, relationships, their own health — to manage a situation that can last months or years.

Long-Term Care Insurance changes that equation entirely.

A quality LTC policy doesn't just pay for care. It brings in professional caregivers, coordinates services and takes the weight of day-to-day care management off your family's shoulders. Most policies include care coordination and case management, which means a trained expert helps navigate what care is needed, where it's provided and how it's delivered.

That gives your family something no amount of money can buy on its own: the freedom to be family.

Instead of scrambling to sell investments, liquidate assets or argue over finances during one of the most emotional periods of their lives, your loved ones can focus on what matters — being present, being supportive and being there without being overwhelmed.

"Individuals who have worked hard and saved throughout their life understand the risks that could impact their net worth, long-term care being the greatest risk as they age," said Jesse Slome, director of the AALTCI. "What they don't know is how easy and affordable it can be to mitigate that risk."

He's right. And the families who plan ahead don't just protect their assets — they protect their relationships, their dignity and the people they love most from a burden no one should have to carry alone.

Experts say to start the conversation now, while you have options. Use the LTC News Cost of Care Calculator to understand teh projected future extended care costs in your area, explore your options through the LTC News Long-Term Care Insurance Learning Center.

👉What would a long-term care need mean for the people you love most — and have you talked with them about it?

Right Time to Plan Is Before You Think You Need To

LTC Insurance is medically underwritten, which means your health at the time you apply determines your eligibility and your premium. Premiums are also based on your age — younger applicants pay less.

Experts recommend starting the planning conversation in your 40s or 50s, well before retirement. In fact, most people aquire an LTC policy between teh ages of 47 and 67. Waiting until a diagnosis or health change may limit your options or make coverage unavailable.

Whether your assets total $100,000 or $10 million, an affordable LTC policy can protect what you've built — and protect the people you'd otherwise ask to step in.

Frequently Asked Questions on Millionaires and Long-Term Care Planning

How many Americans are becoming 401(k) millionaires?

The number of Americans reaching millionaire status through retirement savings continues to grow. According to Fidelity Investments, 401(k) millionaire accounts increased significantly in recent years as long-term investors benefited from market growth, compound interest, and consistent contributions over decades.

Can a million dollars cover retirement and long-term care costs?

A million dollars may not go as far as many people expect, especially when inflation and long-term care expenses are considered. Nursing homes, memory care, assisted living, and in-home care can quickly consume retirement savings if there is no Long-Term Care Insurance plan in place.

What is the biggest financial risk to retirement savings after age 65?

Many financial experts say long-term care is one of the greatest risks to retirement assets. Extended care due to dementia, stroke, Parkinson’s disease, mobility decline, or chronic illness can create years of ongoing expenses that most health insurance and Medicare do not fully cover.

Does Medicare pay for long-term care?

Medicare generally does not pay for ongoing custodial long-term care such as help with bathing, dressing, supervision due to dementia, or extended nursing home stays. Medicare coverage is limited primarily to short-term skilled care following a qualifying medical event.

What are the average long-term care costs in 2026?

Long-term care costs vary by location, but national median annual costs can exceed:

• $68,000 for home health aide services
• $60,000 for assisted living
• $68,000 for memory care
• $129,000 for a nursing home

The LTC News Cost of Care Calculator provides current and projected local care costs nationwide.

Why do wealthy families buy Long-Term Care Insurance?

Many affluent families purchase Long-Term Care Insurance to protect retirement savings, preserve investments, avoid forced asset sales, and reduce caregiving burdens on spouses and adult children. Coverage also helps maintain access to quality care options, including care at home.

What is Partnership Long-Term Care Insurance?

Partnership Long-Term Care Insurance is a special type of LTC policy offered in most states that provides dollar-for-dollar Medicaid asset protection. If policy benefits are exhausted, qualifying policyholders can protect additional assets while still meeting Medicaid eligibility rules.

At what age should you buy Long-Term Care Insurance?

Most experts recommend exploring Long-Term Care Insurance in your 40s or 50s. Premiums are usually lower at younger ages, and medical underwriting becomes more difficult later in life after health conditions develop.

How does Long-Term Care Insurance help families?

Long-Term Care Insurance helps pay for professional caregivers, care coordination, home care, assisted living, memory care, and nursing home care. It can reduce emotional and financial stress on family caregivers and allow loved ones to focus on relationships instead of caregiving logistics.

What percentage of people over 65 will need long-term care?

According to the U.S. Department of Health and Human Services, approximately 56% of Americans age 65 and older will require significant long-term services and supports due to disability, chronic illness, or cognitive decline.

Can long-term care costs impact inherited wealth?

Yes. Without planning, extended care expenses may force families to liquidate investments, sell property, or reduce inheritances to pay for care. Long-Term Care Insurance can help preserve wealth and reduce financial disruption across generations.

Is Long-Term Care Insurance only for the wealthy?

No. Long-Term Care Insurance is designed to help middle-class and affluent families protect savings, income, retirement assets, and independence. Policies are available with a wide range of benefit levels and pricing options based on age and health.

Why is planning for long-term care important before retirement?

Planning early gives you more options, lower premiums, and a greater likelihood of qualifying medically for coverage. Waiting until retirement or after a diagnosis may limit or eliminate available options.