Free long-term care required savings calculator
Find the lump sum you need saved when care begins to self-fund long-term care — from the annual care cost, the years of care to fund and the return your savings earn while you draw them down — updated live as you type.
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Hypothetical projection at fixed rate. Actual savings returns vary. Excludes taxes.
Results are estimates. Consult a professional.
What the long-term care required savings calculator finds
The long-term care required savings calculator answers the next question after you know the cost: how much money do you need to have set aside to pay for care yourself? It finds the lump sum you must hold at the moment care begins so that, with your savings still earning a return while you draw them down, the pot covers every year of care and runs out at the end. That number is your self-funding target.
This is the savings-goal companion to a cost projection. A cost calculator tells you the bill; this one tells you the nest egg — and because your savings keep earning interest during care, the lump sum needed is meaningfully less than simply multiplying the annual cost by the number of years.
How the required lump sum is calculated
The target is the present value of the future stream of care payments, discounted at the return your savings are expected to earn. Because money you have not spent yet keeps compounding, every year of growth shrinks the lump sum you need on day one.
- Annual care cost. The yearly cost of the care you are funding — often the projected future figure from a cost calculator.
- Years of care needed. How many years the lump sum has to last.
- Investment return rate. What your savings earn while you draw them down; a higher return lowers the lump sum you need up front.
A worked example: sizing the self-funding pot
You want to self-fund care that costs $70,000 a year, expect to need 3 years of it, and assume your savings keep earning 5% a year while you draw on them. How big a lump sum do you need when care starts?
Step 1 — Apply the present-value-of-an-annuity formula
Required savings = $70,000 × (1 − 1.05^−3) ÷ 0.05 = $190,627.
Step 2 — See why it beats the naive total
Three years at $70,000 is $210,000 if the money sat in cash. Because the pot keeps earning 5% as you spend it, you need only about $190,627 — roughly $19,000 less, the work the investment return does for you.
Required savings vs. total care cost
It is easy to confuse the lump sum you need with the total bill. They are different numbers, and the gap is the investment return earned on money you have not yet spent.
| Total care cost | Required savings (lump sum) | |
|---|---|---|
| What it answers | How much care will cost in total | How much you need saved when care begins |
| Effect of return | Ignores investment growth | Reduced by the return your savings earn |
| This example | $210,000 (3 × $70,000) | $190,627 |
| Use it to | Understand the size of the problem | Set a concrete savings goal |
The required savings is the present value of the care payments. For projecting the future cost itself, use a long-term care cost calculator first, then feed that annual figure in here.
Ways to cover the required savings
Once you know the target, there are a few ways to reach it — and self-funding is only one of them.
- Self-fund from savings or investments. Build the lump sum yourself; this calculator sets the goal and a higher assumed return lowers it.
- Long-term care insurance. Transfer the risk to an insurer; premiums climb sharply the older you are when you buy.
- Hybrid life/LTC policies. Permanent life insurance with a long-term care rider, so the money is used either way.
- Medicaid as a backstop. Covers care after you have spent down most assets — a safety net, not a plan most people aim for.
Getting the inputs right
- Use a realistic return, not a hopeful one. Money earmarked for near-term care is usually held conservatively, so a modest return (3–5%) is more honest than a stock-market average.
- Match the annual cost to the future, not today. If care is decades away, feed in the inflated future cost from a projection — not today's price.
- Plan for a longer stay than average. Sizing the pot for only the average duration leaves nothing if care runs long, which it often does for cognitive decline.
- Remember this is the day-one figure. It is the lump sum needed when care starts, so you still have to save your way up to it before then.
Required savings terms, defined
How accurate is this required-savings estimate?
The present-value math is exact, but it depends on three guesses: the annual cost of care, how long care lasts, and the return your savings will earn. The return assumption matters most — a lower realised return means the pot empties early, so building in a margin is wise.
Treat the result as a planning target for self-funding long-term care — not financial or insurance advice. Pair it with a future-cost projection for the annual figure, and review the assumptions with a financial professional before committing to a savings plan.
U.S. Department of Health & Human Services (ACL) — longtermcare.gov, the federal long-term care planning resource.U.S. Department of Health & Human Services (ACL) — Costs of Care.Frequently asked questions about the free long-term care required savings calculator
About this Long-term care required savings calculator
This long-term care required savings calculator runs entirely in your browser — nothing you enter is stored or sent anywhere. It computes the present value of your future care payments (annual cost × (1 − (1+r)^−years) ÷ r), giving the lump sum you'd need when care begins so that, earning a return as it's drawn down, it covers every year and finishes at zero. It is a planning target, not financial or insurance advice.
For the future cost itself, start with the long-term care cost calculator. It is one of our free insurance calculators — or browse the complete calculators directory.