Preparing for the Growing Need and Costs of Long-Term Care Among Retirees

Samir Shah, an expert specializing in the U.S. long-term care sector, warns of increasing challenges ahead for Americans who will soon require assistance with daily living activities.

"We are witnessing a rapid increase in demand coinciding with a sharp decline in available care providers," said Shah, chief executive of CareScout, a firm that annually analyzes long-term care costs.

The rising demand is largely fueled by an aging population. Beginning in 2026, the oldest baby boomers will reach 80 years old, an age when the likelihood of needing care significantly increases. Projections from the U.S. Census Bureau indicate that the population aged 85 and older will nearly double to 11.8 million by 2035 and approach 19 million by 2060.

Meanwhile, the long-term care industry faces a workforce shortage, partly due to low wages. In 2023, the median hourly pay for direct care workers was $16.72, which falls below wages for other jobs with similar or lower entry requirements, according to research by PHI, a nonprofit policy organization.

This shortage is expected to worsen, influenced in part by stricter immigration policies. Immigrants currently comprise 28 percent of the long-term care workforce, a share that has been increasing in recent years, according to health policy analysts.

Costs for certain long-term care services surged by up to 10 percent in 2024, more than tripling the general inflation rate of 2.9 percent for that year, as detailed in the latest CareScout report.