Gen X retires: 45% face shortages
Retirement is supposed to be a golden age, but for many Gen Xers, it may not be.
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If older Americans are thinking about retiring, they may not consider moving to another state where elder care costs are lower.
However, the cost of elder care varies widely by state. The average annual cost of assisted living in South Dakota is $52,200, while in Connecticut it’s $107,460. A private room in a nursing home costs $85,045 in Texas and $205,130 in Oregon.
According to the Boston University Retirement Research Center, more than 80% of Americans will need long-term care at some point. Long-term care provides assistance with daily living, such as dressing and eating.
A recent report from Caring.com, a senior care platform, ranks and evaluates each state on affordability of assisted living, nursing homes, and other long-term care metrics.
Long-term care costs can be significant
No matter where you retire, long-term care costs can be significant. According to long-term care network CareScout, assisted living will cost an average of $5,900 per month in 2024. A private room in a nursing home costs an average of $10,646 per month.
Many Americans are unaware of these costs and believe they do not have to pay them. Most Americans incorrectly believe that Medicare covers long-term care, according to a Nationwide survey.
“I think the first thing that surprises them is that Medicare won’t pay for their care,” said Doug Robertson, senior director of government affairs at home health care provider Right at Home. “Sticker shock is not something they plan for, it happens out of the blue,” Robertson told USA TODAY in September.
Much of the data in the Caring.com report comes from CareScout, which publishes median prices for long-term care by state. Here are some great points:
- The least expensive state for assisted living is South Dakota, with annual costs of $52,200. Mississippi and Alabama are ranked second and third.
- Texas has the lowest cost for a private room in a nursing home at $85,045 per year. Missouri and Oklahoma State rank second and third.
Mississippi is the most affordable state for senior care.
According to Caring.com’s analysis, Mississippi is the most affordable state overall for senior care, followed by Texas and Arkansas.
Most affordable states: Hawaii, followed by Connecticut and Rhode Island.
“There are obviously different cost levels in different states,” Susan Crawford, Caring.com’s senior vice president of sales, said in a September interview. “In the 1950s, no one would have thought that they would be spending $13,000 a month on assisted living, nor would they have thought about how to prepare for it.”
Of course, cost is not the only consideration when it comes to elderly care.
AARP published its State Scorecard for Long-Term Care in 2023, evaluating states not only on affordability but also on factors such as access, consumer choice, safety, and quality.
The AARP Scorecard lists Colorado, Massachusetts, Minnesota, Washington and the District of Columbia as top states. None rank near the top in the Caring.com report, which only considers affordability.
“I think quality is a big factor here,” says Lindsey Theodore, a certified financial planner at T. Rowe Price and co-author of another recent report on long-term care.
“When you move to a lower-cost state or a lower-tax state, you have to think about what you’re willing to give up to achieve affordability,” she said in an interview in September.
Top 10 states with the most affordable senior care
Here are the profiles of the 10 most affordable states for senior care, according to Caring.com.
- Mississippi. Caring.com gives Affordable Mississippi a score of 8.98 out of 10. The state’s annual welfare costs are $55,343, second only to South Dakota. Mississippi also ranks second (tied with Alabama) in the cost of a full-time home health aide at $57,200 per year.
- Texas. Texas State has a score of 8.41 out of 10. The state has the lowest median cost for a private room in a nursing home, at $85,045 per year, half the annual cost of New York and California. Texas also spends generously on Medicaid, at $9,637 per enrollee per year.
- Arkansas. With a score of 8.21, Arkansas offers assisted living services for $56,688 per year and home health aide services for $59,488, both of which are relatively affordable.
- Louisiana. The score for this condition is 8.16. Louisiana has the most affordable home health aids of any state, with a median annual cost of $50,336. And these costs have decreased in 2024.
- Alabama. Score: 7.59. Alabama ranks high among states for affordable home health aids, with a median annual cost of $57,200. Assisted living costs average $54,870 per year.
- Missouri. Score: 7.58. The state has the second-lowest annual cost for a private room in a nursing home at $85,775. The cost of assisted living is $61,800 per year.
- Kansas. Score: 7.42. Medicaid spending per enrollee is relatively generous at $10,089 per enrollee. The cost of assisted living is $71,400 per year.
- Okla hola! Score: 6.89. Assisted living costs just $57,870 per year, one of the lowest rates in the nation. Private nursing home rooms cost an average of $91,250, which is also relatively low.
- Wyoming. Score: 6.82. Assisted living costs just $56,400 per year. Home health aides earn an average of $74,360 per year.
- georgia Score: 6.81. The cost of assisted living is $59,280 per year and the cost of home health assistance is $66,352.
Top 10 Most Affordable States for Elderly Care
And the 10 states with the lowest costs for senior care are:
- Hawaii. A private room in a Hawaii nursing home will cost you $196,370.
- Connecticut. Assisted living in Connecticut costs a median of $107,460 per year.
- Rhode Island. Home health aides in Rhode Island earn an average of $96,096 per year.
- Maine. The cost of assisted living in Maine is $95,850 per year.
- Massachusetts. Assisted living costs average $108,696 per year.
- Oregon. A paid nursing home room in Oregon costs $205,130 per year.
- California. The median cost of assisted living in California is $88,200 per year.
- Washington. Home health aides in Washington state earn an average of $96,096 per year.
- New Hampshire. A private room in a nursing home in this state costs $157,680 per year.
- Colorado. Home health aides in Colorado average $96,096 per year.
