William Sautter
Financial Well-Being Coach
I meet with employees one-on-one about their retirement plans every day, and there is one moment that often elicits the same reaction. We will be running someone's retirement income projection; the numbers look solid, and then I will add a long-term care event to the discussion. The reaction is nearly always the same: surprise, then worry.
That reaction makes sense because most people build a retirement plan for the life they hope to live, not for the care they may need one day. Long-term care costs are years away for most employees, so the risk never makes it onto the page. Then it does, and a plan that looked secure suddenly looks fragile.
The plan that isn't built for it
Picture an employee with a 401(k), a home, and what they consider reasonable savings. Add a care need that lasts three to five years, and the hit is often severe and fast. Multi-year home care and assisted living drain retirement accounts and force people to spend down principal instead of living off income. Taxable income climbs in that year and the years that follow. People may need to sell the house, cut everyday spending, and claim Social Security earlier than they planned, which permanently lowers their lifetime income.
The numbers explain the worry. Milliman estimates that an average 65-year-old would need to set aside about $135,000 to cover future long-term care, and for care that lasts five years or longer, that figure can reach $665,000.¹ This is not a remote risk either. Someone turning 65 today has nearly a 70% chance of needing some form of long-term care in the years ahead.²
The damage rarely stops with one person. I see it reach the next generation, as aging parents move in with adult children, lean on them financially, and spend down the legacy they hoped to leave. The children often pay twice: once in care and once in their own time and savings. A single care event can quietly undo two generations of planning.
Where long-term care fits in the retirement plan
Here is how I frame it for employees: long-term care is not a product to sell. It is a risk to plan for, and it belongs in the financial plan the same way emergency savings and retirement contributions do. It is one more tool in the toolbox. The goal of a long-term care strategy is straightforward: protect choices, protect wealth, and protect the cash flow you are counting on in retirement.
Timing matters more than people expect. There is a sweet spot, roughly ages 50 to 65. Wait too long, and coverage becomes costly or out of reach, since carriers decline a meaningful share of older applicants. Start younger, and because these plans are typically level premium, you lock in a lower cost for the life of the policy. Someone with a family history worth planning around may have good reason to look even earlier.
Where employers can start
The gap here is not interest. It is awareness. Only about 44% of people have ever discussed the possibility of needing care in retirement, and roughly 3% own any coverage for it.³ In my sessions, the employees who feel most in control are the ones who simply ran the numbers early, while they still had options.
A few moves make the difference. Put the real numbers in front of people through a simple stress test that shows a retirement plan with a care event and without one, so the choice is concrete rather than abstract. Make one-on-one financial coaching available, so employees get answers instead of hunting for them. Offer voluntary traditional or hybrid coverage that employees can buy through payroll, the way they already do with life and disability. And know your population, using your own data to tailor what you communicate and to whom.
None of this requires an employee to have all the answers before they start. It requires a starting point.
Financial readiness is one lens on long-term care, and it is the one that tends to make the risk real, because it turns a someday worry into a line on the plan. My message to employees never changes: do not hope it won't happen. Plan for it now.
¹ Milliman, 2025 Milliman Long-Term Care Index. https://www.milliman.com/en/insight/2025-milliman-long-term-care-index
² Administration for Community Living, U.S. Department of Health and Human Services, How Much Care Will You Need? https://acl.gov/ltc/basic-needs/how-much-care-will-you-need
³ LIMRA, Workplace Long-Term Care Solutions May Help Employees Protect Their Finances (2025). https://www.limra.com/en/newsroom/industry-trends/2025/workplace-long-term-care-solutions-may-help-employees-protect-their-finances/
