You probably already know your Social Security check doesn’t stretch as far as it used to. But what you may not realize is exactly how fast the gap is growing between what you receive and what you’re expected to pay for care.

A new report from the AARP Public Policy Institute, released this week, paints a picture that should alarm anyone approaching retirement or already living on a fixed income. The cost of the most common long-term care services has jumped nearly 50% in just five years. 

And the income meant to help you keep up? It grew by less than half that rate. The numbers get worse the deeper you look. For millions of retirees, the question is no longer whether care will be affordable. The question is what happens when it isn’t.

Long-term care costs are rising two to three times faster than retiree income

The AARP report, based on data from the Genworth/CareScout Cost of Care Survey, tracked changes in long-term care costs from 2019 to 2024. The findings cut across every type of care older Americans rely on.

Home care and assisted living costs rose by close to 50%, adult day services increased 33%. Nursing home costs climbed 25% and over that same five-year window, the median household income for Americans 65 and older grew by just 22%.

If you’re a typical older adult earning around $60,000 a year, the annual cost of moderate home care (roughly 30 hours per week) now consumes nearly your entire income. Assisted living or a nursing home exceeds it.

What long-term care actually costs in 2024 dollars

According to the AARP report, the national cost of long-term care now ranges from about $26,000 a year for adult day services to nearly $128,000 for a private nursing home room.

Cost breakdown by care type:

• Adult day services: approximately $26,000 per year
• Home care (30 hours/week): approximately $50,000 or more per year
• Assisted living: varies widely by state, up nearly 50% since 2019
• Private nursing home room: approximately $128,000 per year

Compare those numbers to a median household income of roughly $60,000 for adults 65 and older. Then consider that the median financial assets for households headed by someone 75 or older sit at about $50,000. That’s barely enough to cover one year of home care or a few months of nursing home care before savings run dry.

Social Security’s 2.8% raise barely covers your rising Medicare premium

The Social Security Administration announced a 2.8% COLA for 2026, translating to about $56 more per month for the average retired worker. That brings the typical monthly benefit to roughly $2,064. The Centers for Medicare & Medicaid Services (CMS) set the 2026 Medicare Part B premium at $202.90 per month, up $17.90 from $185 in 2025. 

That’s a 9.7% increase, more than three times the COLA. In practical terms, roughly a third of your Social Security raise goes straight to Medicare before you can spend a dollar on groceries, rent, or prescriptions. The Part B annual deductible also climbed from $257 to $283.

This pattern has repeated for two decades, and it’s getting worse

An independent analysis by Social Security and Medicare policy analyst Mary Johnson found that from 2005 to 2024, Medicare Part B premiums rose an average of 5.5% each year. Over the same period, Social Security COLAs averaged just 2.6%.

The reason is structural. Medicare costs are not included in the Consumer Price Index used to calculate the COLA. So while the COLA formula tracks things like gas and groceries, it largely ignores the fastest-growing expense retirees actually face, which is healthcare.

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According to the Center for Retirement Research at Boston College, the 2026 Part B premium increase will consume more than 25% of the Social Security COLA. And Part B premiums as a share of the average Social Security benefit will reach an all-time high of 9.4%.

Middle-income retirees face the tightest squeeze

The AARP report identifies middle-income older adults as the group under the most financial pressure. You earn too much to qualify for Medicaid, which covers long-term care for low-income Americans. But you don’t earn nearly enough to comfortably absorb these rising costs.

About 60% of households headed by someone 65 or older include more than one person. When a large portion of household income goes toward one person’s care, fewer resources remain for a spouse or partner. The financial strain doesn’t stop with the person receiving care.

Related: Retirees may earn more with a MYGA than a savings account

The U.S. Department of Health and Human Services estimates that 56% of adults who turned 65 between 2021 and 2025 will need long-term care services during their lifetime. Yet many people have no plan for how they’d pay for it, often mistakenly believing Medicare will cover the costs.

Medicare generally does not pay for long-term care. It covers limited stays in skilled nursing facilities after a hospital admission, but not the ongoing home care, assisted living, or custodial nursing home care that most people actually need.

Where you live dramatically changes what you’ll pay

Long-term care costs aren’t uniform across the country, and your state plays a major role in what you’ll spend. The AARP report found that for every type of service, the cost in the most expensive state is at least double that of the least expensive one.

State-level cost differences at a glance:

• Most expensive states for long-term care: Maine, West Virginia, Oregon
• Least expensive states: Louisiana, Maryland, Utah, Texas

In wealthier states, higher local incomes can partially offset home care costs, but nursing home care remains expensive almost everywhere. The state-by-state variation matters for planning. If you’re considering relocating in retirement, long-term care affordability should be a factor alongside housing costs and tax rates.

When care becomes unaffordable, families absorb the cost themselves

The financial reality of long-term care has created a parallel economy of unpaid family caregiving. When professional care is out of reach, spouses, adult children, and other family members step in.

According to the AARP report, unpaid caregivers provided support valued at an estimated $600 billion in 2021 across the United States. Many of these caregivers reduce their work hours or leave jobs entirely to manage caregiving duties, sacrificing their own income, savings, and retirement security in the process.

“More families have no choice but to step in themselves, often providing care beyond what they realistically have the time, resources or capacity to handle,” said Alan Weil, Senior Vice President at the AARP Public Policy Institute.

A 50-year-old who leaves the workforce to care for a parent loses years of earnings, employer retirement contributions, and Social Security credits. Those losses follow you into your own retirement.

Steps you can take to protect yourself and your family

There is no single solution to the long-term care affordability crisis, but there are steps you can take now to reduce your exposure.

Planning moves worth considering:

• Don’t assume Medicare will cover long-term care: It generally does not. Understand what Medicare Parts A and B actually pay for, and where the coverage gaps are.
• Evaluating long-term care insurance early: Hybrid policies that combine life insurance with long-term care coverage are worth exploring, but read the fine print on benefit triggers and inflation protection.
• Check your state’s Medicaid eligibility rules: Medicaid is the primary public payer for long-term care, but eligibility thresholds and covered services vary significantly by state.
• Build healthcare costs into your retirement projections: A retirement plan that doesn’t account for rising Medicare premiums, out-of-pocket costs, and potential long-term care needs is incomplete.
• Talk to your family before a crisis hits: Discuss who would provide care, how costs would be shared, and what legal documents (power of attorney, advance directives) are in place.
• Consider your location: If you’re planning a retirement move, factor in long-term care costs and Medicaid access in your target state.

None of these steps eliminates the risk entirely. But each one narrows the gap between what you might need and what you can afford.

What’s being done at the policy level, and what’s stalled

AARP has been pushing Congress to expand long-term care coverage under Medicare and Medicaid, and to provide stronger financial support for family caregivers, including a proposed caregiver tax credit.

President Trump advocated for a caregiver tax credit during his campaign, but as of March 2026, related legislation has stalled in Congress. The broader political landscape around Medicare and Medicaid remains uncertain, with ongoing debates over program funding and benefit structures.

“AARP is working to help families afford long-term care by expanding access to services and supports, so they aren’t forced to rely solely on unpaid caregivers or drain their savings,” Weil said. “We’re advocating for public policies that ease the financial burden and protect older adults and their families.”

For now, the gap between what care costs and what retirees can afford continues to widen. And until policy catches up, the financial burden falls directly on you and your family.