The True Cost of Nursing Homes—and How to Financially Prepare

The cost of nursing homes is on the rise, with the national median monthly cost reaching nearly $11,000 in 2025. In many states, however, average monthly costs can exceed $15,000, with Alaska leading the nation at over $31,000 per month. While almost 70% of people turning 65 will need long-term care at some point in their lives, fewer than one-third of Americans over 50 have a plan to protect their retirement assets from long-term care costs.

At DeWitt & Dunn, we help clients plan ahead to protect their savings and ensure they’re financially equipped for any stage of retirement. Let us share with you the true cost of nursing homes, and you can plan ahead financially.

The Rising Cost of Nursing Homes

The national median cost of a private nursing home room in 2024 was $350 per day or $10,646 per month. Semiprivate rooms averaged $305 per day or $8,669 per month, which adds up to $127,750 and $111,325 per year, respectively.

However, these numbers merely represent the situation from last year, which has seen a 7-9% year-over-year increase since 2023. Inflation will continue to affect the prices of nursing homes. According to current projections, by 2030, the median annual costs nationally for semiprivate rooms will be $132,928, while private rooms will rise to $152,540.

Looking specifically at our home state of Texas, the cost of nursing homes here is lower than the national median. Here, the median cost of a semiprivate room in 2025 is $5,639 per month, expected to rise 3% annually. A private room averages $7,300 per month, with an expected annual increase of 4%.

No matter how you look at it, these rising costs can rapidly deplete one’s savings or even the best-prepared retirement accounts. Additionally, you can’t solely rely on federal assistance. For example, Social Security benefits typically only cover 21% of expenses for semi-private rooms, Medicaid only covers about 62% of nursing facility residents, and Medicare typically only allows for up to 100 days of qualified care, whereas the average length of a stay in a nursing home exceeds two years.

Plus, not only does federal assistance not cover everything, but qualifying for Medicaid often requires spending down your assets first to be eligible for financial assistance.

How to Prepare Financially for Nursing Home Expenses

There really is no substitute for planning early, as it allows you greater opportunities for options and building up your financials. With the cost of nursing homes only expected to rise, you can start your plan now so you don’t have to worry about outliving your money. Here are three options we suggest you discuss with a financial planner.

#1: Long-Term Care Insurance: Provides coverage for services such as nursing home stays or in-home care, with premiums determined by factors including age and health. Typically, the earlier you apply, the more affordable your premiums will be. 

#2: Hybrid Insurance Solutions: Life insurance policies with long-term care riders can provide more flexibility, allowing access to a portion of the policy’s benefits to cover care costs while preserving a death benefit for your loved ones.

#3: Fixed Annuities: Allow your money to grow tax-deferred while protecting your principal from market losses. Once activated, the income payouts can help cover nursing home costs without depleting one’s savings.

How DeWitt & Dunn Can Help You Plan for the Cost of Nursing Homes

At Dewitt & Dunn, we provide a holistic approach to your retirement planning, not just the here and now, but personalized retirement income strategies designed to anticipate healthcare needs like nursing home care. Our solutions help protect your principal while assisting with an income plan you can’t outlive.

Ready to get started? Schedule your complimentary consultation with DeWitt & Dunn today to build your long-term care financial strategy.