One hundred sixteen thousand dollars.
That is the number.
That is roughly what one year in a private nursing home room costs today, according to the most recent national cost-of-care data. Assisted living runs closer to $64,000 a year. Neither figure is shrinking.
Now ask yourself a harder question. What happens to your retirement income if you need that care for three years? Or five?
Most people at or near retirement have never run that math. They have saved carefully. They have a plan for income. They have a plan for taxes. But the single largest financial risk of later life, the cost of extended care, sits in a blind spot.
At King Legacy Group, we help retirement-ready families confront that number directly, and fund for it in a way that does not waste a dollar.
The Real Cost of Care, and the Old Way of Paying for It
Long-Term Care, which is the extended personal and medical help people need when they can no longer handle daily activities like bathing, dressing, or eating on their own, is expensive and often lengthy. The average claim lasts roughly three years. Do the arithmetic against that six-figure annual cost and the exposure becomes obvious.
For decades, the standard answer was standalone long-term care insurance. You paid an annual premium. If you needed care, the policy paid a benefit. If you did not, you got nothing back.
That design carried two serious problems.
First, it was use-it-or-lose-it. Many careful savers paid premiums for twenty years, died peacefully in their sleep, and left nothing behind for those premiums. Their families received no benefit at all.
Second, the premiums were not stable. Insurers underpriced these policies for years, then came back to existing policyholders with steep increases. Rate hikes of forty to sixty percent on in-force policies have been common. Imagine budgeting a fixed premium in retirement, then being told it is climbing by half. Many retirees dropped coverage precisely when they were closest to needing it.
Those two flaws are why so many people simply avoided the decision altogether. The product felt like a bet you could only lose.
The Strategy: Make One Dollar Do Two Jobs
Here is the shift, and it starts with strategy, not with a product.
The goal is not to buy a policy. The goal is to protect your retirement income from a care event while making sure that if the care event never comes, your money still passes to the people you love. In other words, you want a single dollar of premium to do two jobs.
That is exactly what an asset-based long-term care solution is built to do.
Instead of a pure use-it-or-lose-it policy, an asset-based structure combines a benefit for care with a benefit for your heirs. It is a hybrid design that links a life or annuity contract to a long-term care benefit through a rider, which is simply an add-on that expands what the contract can pay for.
The mechanics are straightforward once you see them:
If you need care, the contract pays for that care, often at a multiple of what you put in.
If you never need care, the contract pays a benefit to your beneficiaries when you pass.
If you change your mind entirely, many of these structures let you recover a portion of what you committed.
That is the answer to the old objection. There is no scenario where the money simply evaporates. The premium is always working, either as care funding or as a legacy benefit. The use-it-or-lose-it problem is gone.
There is also a tax dimension worth understanding in plain terms. Certain long-term care riders are structured so that the dollars used to pay for qualifying care come out on a tax-advantaged basis. The strategy is designed around the tax code, not around a brand name. The specific contract that executes it is a decision for your consultation, because the right vehicle depends on your health, your age, your assets, and your goals. Strategy first. Product second.
A New Funding Angle Worth Knowing
Recent federal law added a useful tool. Under a provision of the Setting Every Community Up for Retirement Enhancement Act, known as SECURE 2.0, a 2022 federal law that updated retirement account rules, consumers can now withdraw a limited amount each year from qualified retirement plans, penalty-free, specifically to pay for long-term care coverage.
The amount is capped, so it is not a full funding source on its own. But it is a meaningful assist. It lets some retirees redirect a slice of money already sitting in a retirement account toward protecting that same retirement account from a care event. It turns a small, otherwise idle amount into a shield.
This is the kind of detail that a coordinated plan captures and a piecemeal approach misses.
A Hypothetical Case Study
The following is a fictional, composite scenario for educational purposes only. It does not represent any actual client or client result.
Consider a married couple, both age sixty-two, recently retired. We will call them the Harrises, a stand-in for a very common situation, not real clients.
The Harrises have about $1.4 million in retirement savings and a paid-off home. Their income plan works. Their fear is the one nobody wants to say out loud: that a long stay in memory care could drain the accounts they built for each other and for their children.
They looked at standalone long-term care insurance years earlier and walked away, unwilling to pay premiums that might buy nothing.
Working through an asset-based approach instead, they reposition $150,000 of low-yield savings that was earning almost nothing into a single hybrid structure. That repositioned money now creates a pool of long-term care benefits substantially larger than the amount they moved, available to either spouse if care is needed. If neither of them ever needs extended care, the same structure passes a death benefit to their two children.
Notice what changed. They did not spend $150,000. They moved it. The dollars are still theirs, still working, now doing two jobs instead of sitting idle and exposed. The six-figure care question that used to keep them up at night is answered, and their legacy is protected in every outcome.
The numbers here are illustrative. Real results depend on age, health, and current rates. But the structure is real, and it is available to the right candidate.
Frequently Asked Questions
What is the best way to pay for long-term care without losing money if I never use it?
The most efficient approach for most retirement-ready families is an asset-based long-term care solution, sometimes called a hybrid structure. It links care funding to a benefit for your heirs, so a single premium either pays for your care if you need it or passes a benefit to your family if you do not. Unlike traditional use-it-or-lose-it policies, the money is never simply lost. The right structure depends on your health, assets, and goals, which is what a strategy review is for.
How is a hybrid solution different from traditional long-term care insurance?
Traditional standalone policies pay only if you need care, and they have a history of steep premium increases on existing policyholders. A hybrid, asset-based approach guarantees the money does one of two things: fund your care or fund your legacy. It removes both the use-it-or-lose-it problem and much of the premium-increase anxiety that made older policies so frustrating.
How much does long-term care actually cost in 2026?
A private nursing home room runs near $116,000 per year, and assisted living is close to $64,000 per year, based on recent national cost-of-care data. With the average care event lasting about three years, the total exposure for a single person can easily exceed a quarter of a million dollars, which is why building this into your retirement plan matters.
Can I use retirement account money to help pay for this?
Yes, within limits. A provision of the Setting Every Community Up for Retirement Enhancement Act, known as SECURE 2.0, now allows a capped, penalty-free annual withdrawal from qualified retirement plans to help pay long-term care premiums. It is not a complete funding source by itself, but it is a helpful piece of a coordinated plan.
Your Next Step
The $116,000 question does not go away because you avoid it. It only gets more expensive. The families who handle it well are the ones who face the number early and build a structure where every premium dollar is working, whether they ever need care or not.
At King Legacy Group, that is the heart of how we design your LivingLEGACY™: growth, protection, and tax efficiency working together, so your retirement income is defended and your legacy is secure in every outcome.
The $116,000 question does not answer itself. Schedule your strategy review here.
Complimentary. No pressure. A clear path to your LivingLEGACY™.
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