Americans with a financial advisor are twice as likely to have planned for long-term care as those without one. Among those with an advisor, 66% have planned for their own potential needs and 58% for a loved one's care. Among those without, those figures fall to 34% and 29% respectively, according to Northwestern Mutual's 2026 Planning and Progress Study, which surveyed 4,375 US adults in January 2026.
The gap is striking given that 61% of Americans say they expect to need long-term care at some point, and 56% expect to provide it for someone they love.
What most haven't accounted for, however, is the cost. The annual expense of a home health aide providing eight hours of care per day reached $99,280 in 2025, according to the 2025 illumifin Cost of Care Study. Northwestern Mutual's analysis of national long-term care cost data found the average annual rate of increase between 2021 and 2025 was 4.77%. At that pace, the figure is on a trajectory that will strain retirement savings for clients who have not built it into a financial plan.
Much of that gap comes down to a misconception advisors hear regularly. Nearly six in 10 Americans mistakenly believe Medicare covers long-term care, according to the 2025 Nationwide Retirement Institute survey. Medicare covers short-term skilled nursing care under specific conditions. It does not fund the ongoing custodial care that most people picture when they think about aging, including in-home aides, assisted living, and memory care.
The preference for aging at home makes that gap more expensive to close. Across all generations, 73% of Americans say they would prefer in-home care if a health event required long-term support, according to the Northwestern Mutual study, with the figure rising to 83% among Boomers and older adults. In-home care delivered over years typically costs more in total than facility-based alternatives.
The financial strain of caregiving does not stay at home. Nearly four in ten Americans say they currently provide care or have done so in the past, and the workforce impact is measurable. Caregiving costs US employers an estimated $50 billion annually in lost productivity, according to the Employee Benefits Research Institute's Caregiving@Work initiative, published in July 2026.
Among those who have provided care, 69% report taking at least one financial step to absorb the impact, including cutting spending, drawing from savings, working additional hours, or taking on debt. Those pressures are measurable in benefits utilization and workforce participation data well before they surface elsewhere.
Only 3% of Americans over age 50 hold long-term care insurance, according to LIMRA estimates. That coverage gap exists partly because LTC has long occupied a middle ground in employer benefits, typically offered as a voluntary add-on with low participation rates, a structure that produces adverse selection rather than broad coverage.
The Northwestern Mutual data reinforces a practical point about timing. John Roberts, chief field officer at Northwestern Mutual, noted that many Americans do not know Medicare generally does not pay for long-term care services, calling it precisely the kind of blind spot a financial professional can help uncover.
The study found that Americans who hold this Medicare misconception are also among the least likely to have planned financially for their own potential needs. It is the same client, with the same gap, that advisors are already positioned to address through the health, retirement, and financial wellness conversations already underway.
