Long-Term Care Could Drain Your Savings. Here Is How to Prepare.

Long-term care is the single largest threat to a retirement portfolio that does not come from the stock market. In Massachusetts, a private room in a nursing home now runs roughly $200,000 a year, and a decent assisted living community in the Boston area lands around $90,000 to $110,000 a year. A three-year stay can erase $600,000 to $700,000 in after-tax dollars. That is why I raise this topic with every household I work with, even the ones with $5 million portfolios who assume they are immune.

I am Nick Stevens, CFP®, founder of Evergreen Wealth Management in Boston. Here is how I think about planning for long-term care for families with $1 million to $10 million in assets, what the real numbers look like in Massachusetts, and the honest tradeoffs between insurance, self-funding, and hybrid approaches.

What does long-term care actually cost in Massachusetts?

Massachusetts is one of the most expensive states in the country for long-term care. Labor costs, regulation, and real estate all push prices higher than the national average. Here are the figures I use with clients, drawn from the Genworth Cost of Care Survey and local provider pricing in the Boston metro:

Type of Care	Annual Cost in MA (2025)	Notes
Nursing home, private room	~$200,000	Higher in Boston and affluent suburbs
Nursing home, semi-private room	~$170,000	Limited availability in premium communities
Assisted living (one bedroom)	$90,000 – $110,000	Boston metro often $120,000+
Memory care add-on	+$20,000 – $40,000	Secured units, higher staff ratios
Home health aide (44 hrs/week)	$80,000 – $95,000	24/7 care easily exceeds $250,000
Adult day health services	$22,000 – $30,000	Often combined with family caregiving

Those are sticker prices. What people actually spend depends on how long they need care and what kind. Research from the U.S. Department of Health and Human Services shows the average person turning 65 today has about a 70% chance of needing some form of long-term care, and roughly 20% will need it for more than five years. Women, on average, need care longer than men.

So the honest planning question is not “will I need care?” It is “for how long, and how will I pay for it?”

Why Medicare and MassHealth are not the answer most people think

This is where I see the biggest misunderstanding. Medicare does not cover long-term custodial care. It covers up to 100 days of skilled nursing after a qualifying hospital stay, and even then only the first 20 days are fully paid. After that, you are on your own for the room-and-board type care most people actually need.

MassHealth (the Massachusetts Medicaid program) does cover nursing home care, but only after you have spent down your assets to roughly $2,000 for an individual. A community spouse is allowed to keep a more generous amount (the Community Spouse Resource Allowance, which for 2026 is around $157,920), and the primary home is exempt up to an equity limit of roughly $1,097,000 in Massachusetts. But there is a five-year lookback on asset transfers, and MassHealth will place a lien on the estate for recovery after the second spouse passes.

For families with $1 million or more in assets, MassHealth is not a plan. It is a last resort that kicks in only after the portfolio is gone. If you want any control over where you receive care, who provides it, or what is left for your family, you need to pay privately.

Should I buy long-term care insurance?

This is the question I get most often, and my answer is: it depends on your net worth, your age, and your health. Traditional long-term care insurance has a bad reputation for good reason. Premiums can and do rise, carriers have pulled out of the market, and the underwriting is tight. If you have any significant health history, you may not qualify at all.

Here is my rough framework for households in the $1M to $10M range:

• Under $1 million in investable assets: Insurance is often unaffordable and may not be worth the squeeze. Planning around MassHealth becomes more relevant.
• $1 million to $3 million: This is where long-term care insurance (or a hybrid policy) is most valuable. A significant care event can wipe out decades of savings.
• $3 million to $10 million: Self-funding is viable, but hybrid policies still make sense for some families because they shift the sequence-of-returns risk and preserve legacy goals.
• Over $10 million: Self-funding is almost always the right answer. The premiums on a meaningful policy cost more than the risk itself.

For a healthy 60-year-old couple in Massachusetts, a traditional LTC policy with a $200 daily benefit, three-year benefit period, and 3% inflation rider runs roughly $4,500 to $7,000 a year per person. Hybrid life-or-LTC policies (where unused benefits pay out as a death benefit) typically require a single premium of $100,000 to $200,000 or a 10-pay structure. The hybrid design removes the “use it or lose it” problem that makes traditional policies hard to swallow.

What does a self-funding plan actually look like?

Self-funding does not mean writing a check from your checking account when the bill arrives. It means carving out a specific bucket of assets, usually the most tax-efficient ones, and earmarking them for care. For my clients who choose this route, here is the structure I typically recommend:

1. Set aside a dedicated LTC reserve sized to cover 3 to 5 years of care at current Massachusetts prices. For a couple, that is roughly $1.2 million to $2 million in today’s dollars.
2. Invest it conservatively but not in cash. A globally diversified portfolio with a meaningful bond allocation (something like 40% equity, 60% fixed income) gives you inflation protection without putting the reserve at the mercy of a bad market year.
3. Use tax-advantaged accounts strategically. Qualified medical expenses, including most long-term care costs, are deductible as itemized medical expenses above 7.5% of AGI. HSAs can reimburse qualified LTC premiums up to age-based limits. Long-term care insurance premiums themselves have their own federal deduction schedule.
4. Plan around the Massachusetts estate tax. If a long care event depletes the portfolio, the estate tax picture changes. That can actually help some families drop below the $2 million MA estate tax cliff, but it is a terrible way to get there.

How does the Massachusetts estate tax interact with long-term care?

Massachusetts has a $2 million estate tax exemption, and it is a cliff — above $2 million, the entire estate is taxable (though a $99,600 credit takes the edge off). For affluent families, planning for long-term care and planning for the MA estate tax are the same conversation.

Irrevocable trusts, particularly income-only irrevocable trusts, can protect assets from both estate tax and MassHealth recovery if funded more than five years before a care event. They are not right for everyone — once assets go into the trust, you do not control them — but they can be powerful for families who want to preserve a home or a substantial portfolio for the next generation.

I wrote more about the estate tax cliff in a separate piece, and it is worth reading alongside this one. Coordination matters.

How Evergreen Wealth Management helps with long-term care planning

At Evergreen, we work with clients on a flat monthly fee — typically a flat monthly fee a month — regardless of portfolio size. That matters for this topic specifically, because traditional advisors charging 1% of assets under management earn less money when you spend down assets on care, which creates a conflict of interest around insurance recommendations and spend-down planning. Our flat-fee model removes that conflict entirely.

When we sit down with a client who is approaching retirement, long-term care is one of the first conversations we have. We model what a three-year care event would do to the portfolio, compare the cost of insurance against the self-funding math, and integrate the decision with MA estate tax planning and Roth conversion strategy. It is not a separate product pitch — it is part of the same investment and planning work we do every quarter.

Frequently Asked Questions

At what age should I buy long-term care insurance?

The sweet spot is usually between 55 and 65. Premiums rise sharply after 65, and underwriting gets harder. Before 55, you are paying for coverage you may not need for 30 years, during which the carrier may change its rates or exit the market. If you have a strong family history of Alzheimer’s or early cognitive decline, shift that window earlier.

Can I just move to a lower-cost state when I need care?

Some families plan on this, and it occasionally works. But care needs often arrive suddenly, and moving a parent with dementia across state lines to save money is harder than it sounds. Staying near family and existing medical providers usually wins out. Plan for Massachusetts costs if you intend to stay in Massachusetts.

What is the difference between a flat-fee advisor and a percentage-based advisor when it comes to LTC planning?

An advisor paid a percentage of assets has a financial interest in keeping those assets invested and growing. Recommending a $150,000 hybrid LTC policy, or a $2 million MassHealth trust, means less assets under their fee. At Evergreen, our fee is flat regardless of what you do with your money, which is one reason clients tell us the advice feels different. If the math says you should self-insure, we say so. If it says you should insure, we say so.

Is long-term care insurance tax deductible in Massachusetts?

Premiums for qualifying long-term care policies are federally deductible as medical expenses, subject to age-based limits (for 2026, up to $5,880 for those 61–70 and $7,350 for those over 70). Massachusetts conforms to the federal treatment on itemized medical deductions. Benefits received from a tax-qualified policy are generally tax-free.

The next step

If you are within ten years of retirement and you have not run the numbers on long-term care, that is the single most important planning exercise I can recommend. Not because I want to sell you insurance — we do not sell insurance — but because the cost of ignoring this risk is measured in hundreds of thousands of dollars and, sometimes, in family relationships. If you would like to talk through what this looks like in your situation, you can reach out through our becoming a client page. For a sense of how we have helped other families work through this, our client scenarios page has a few examples.

Nick Stevens, CFP® is the founder of Evergreen Wealth Management in Boston, a flat-fee financial planning and investment management firm. Evergreen charges a fixed monthly fee regardless of portfolio size. Learn more about how we work at /fee-structure/ or get in touch at /contact-us/.