At the Diamond Head pickleball courts in Honolulu, I met a man who said he had just put his 94-year-old mother in an eldercare home. Since my parents are 78 and 80, my ears lit up. I know it will be up to me to take care of them when they can no longer take care of themselves. My older sister is in New York City, and I’m not sure she has the capacity or willingness as I do.
I asked the man how much the eldercare home – with seven other residents and a full-time staff – costs a month. He said $18,000, and I was blown away. Was this the Rolls Royce of group homes?
All this time, I thought the cost was closer to $10,000 a month, a cost I’ve been mentally preparing to pay if necessary. But I realized the $10,000 figure was anchored to prices from years ago, when I last wrote about the cost of long-term care insurance.
Inflation sure has a nasty way of making life more costly. This is why it’s so important to fix our largest costs as much as possible.
For most of us, our biggest cost is housing. If we can lock in our living expenses, own one car for 10+ years, and be thoughtful about food spending as prices rise, we’ll be okay. I do hope everybody pays off their mortgage by the time they retire.
$18,000 A Month Is Actually A Discount For Eldercare
As we got to talking while waiting for our turn to play, the fellow said he hadn’t been planning to move his mother to the eldercare home at $18,000 a month. But a room opened up and he was encouraged to take it. Demand is extraordinarily high on Oahu, where many come to retire and where residents enjoy the longest median life expectancy in the country.
Before transferring his mother to the facility, he had eldercare specialists come to care for her 24/7 at her three-bedroom home in Kahala. The cost? A whopping $35,000 a month, or $420,000 a year!
He said paying for daytime care felt reasonable. It was the night care that really hurt financially, since his mother slept most of the time, so there wasn’t that much for the caretakers to do.
He eventually told his mother, who has been suffering from dementia since she was 90, that they were moving. The trust providing for her care would have run out in one year at the current burn rate.
And beyond the finances, they felt it was better for her to live in a community where she could socialize and make friends. The importance of friendships is backed up by the Harvard longitudinal study on happiness, which found that people with close relationships lived the longest and reported the most happiness.
My pickleball friend also mentioned that physical therapists and other specialists visit the facility weekly at extra cost, bringing the likely annual total closer to $230,000 rather than the $216,000 base a year.
The Eldercare Spectrum: What’s Actually Out There Nationwide
There are all types of eldercare in the market today. Let me break down the full spectrum.
1. In-Home Care — $5,000–$35,000+/month
The most flexible option, where a caregiver comes to your parent’s home. This is usually the most desired option since it’s the most familiar and comfortable.
Costs vary wildly based on hours. According to the Alzheimer’s Association, a paid non-medical home health aide runs about $34 per hour, or roughly $5,900/month for “standard” full-time care (about 44 hours/week).
But 24/7 live-in care, what my pickleball friend was paying for his mother, can run $20,000 to $35,000+ a month, especially in expensive markets like Hawaii. You’re paying for someone to be there even when your parent is asleep, which is where costs can spiral.
Best for: Those who are not yet ready to leave home, have family support to help coordinate care, and don’t need intensive medical supervision.
2. Adult Day Services (Daycare) — ~$100/day ($2,000–$3,000/month)
A supervised daytime program where seniors participate in activities, meals, and sometimes therapy, then return home at night. This is an overlooked gem for early-stage needs and for giving family caregivers a break.
Best for: Earlier stages of cognitive or physical decline; families where one member can still manage evenings and nights.
3. Board and Care / Group Homes (6–20 residents) — $3,500–$18,000+/month
This is what my pickleball friend’s mother moved into. These are small, often residential-style homes, sometimes literally a converted single-family house, with a handful of residents and a higher staff-to-resident ratio than large facilities.
Nationally, typical costs run $3,500 to $6,000/month for standard care, though in high-cost markets like Honolulu, expect to pay significantly more. The $18,000/month his mother pays reflects both Hawaii’s cost of living and the specialized dementia care she requires.
In a residential care home with 6 residents and 3 staff members, each caregiver supports roughly 2 residents, compared to a large facility with 100 residents and 30 staff, where each caregiver manages about 3.3 residents. The tradeoff is a more intimate, personalized experience at a higher per-bed cost.
Best for: Seniors who feel overwhelmed in large institutional settings, those with dementia needing consistent routines, and families who want a family-like atmosphere over a hotel-like amenity package.
4. Assisted Living (50–150+ residents) — $5,000–$11,000/month
Large-scale purpose-built communities offering private apartments or rooms, communal dining, social activities, and 24-hour non-medical staff. The national median monthly cost for assisted living has risen to $6,200 per month. These facilities typically offer a range of care tiers, so residents pay more as their needs increase.
This is the option that tends to look most like a “retirement resort” – fitness centers, activity calendars, organized outings. The tradeoff is a higher resident-to-caregiver ratio and a more institutional feel.
Best for: Relatively active seniors who value socialization and amenities and need moderate help with daily activities but not intensive medical care. This is the most attractive option for me when I’m really old.
5. Memory Care — $6,700–$12,000+/month
Specialized care for residents with Alzheimer’s, dementia, or other cognitive conditions. The median cost for memory care in the U.S. is $8,019 per month as of early 2026. Memory care units feature enhanced security measures, specially trained staff, higher supervision ratios, and dementia-specific programming. They can exist as standalone facilities, as wings within assisted living communities, or within nursing homes.
Compared to standard assisted living at roughly $5,676/month, memory care runs higher due to the specialized level of care; compared to nursing homes at $9,200–$10,300/month, memory care typically costs less because it involves less intensive medical intervention.
Best for: Parents with Alzheimer’s or dementia who need secure, specialized supervision and structured cognitive programming.
6. Nursing Homes / Skilled Nursing Facilities (40–200+ beds) — $9,800–$11,300+/month
The most medically intensive residential option. The median cost of a private room in a nursing home is now $376 per day, or $11,294 per month, as of early 2026; semiprivate rooms run a median of $328 per day or $9,842 per month. These are the large facilities my pickleball friend alluded to – hospital-like settings with 24-hour nursing care, rehabilitation services, and on-site medical staff.
Despite being among the most expensive care types by monthly cost, the per-bed cost can sometimes be lower than a boutique group home because of the economies of scale. That’s exactly what my pickleball friend discovered: the 100-bed facility near his mother’s group home was cheaper per month, even though it offered more clinical infrastructure.
Best for: Those needing daily medical care, skilled nursing, physical/occupational therapy, or who are recovering from surgery or serious illness.
The Edlercare Cost Comparison at a Glance
| Type of Care | Typical Monthly Cost | # of Residents |
|---|---|---|
| Adult Day Services | $2,000–$3,000 | N/A (daytime only) |
| Board & Care / Group Home | $3,500–$18,000+ | 6–20 |
| Assisted Living | $5,000–$11,000 | 50–150+ |
| Memory Care | $6,700–$12,000+ | Varies |
| Nursing Home (semiprivate) | $9,800–$10,900 | 40–200+ |
| Nursing Home (private) | $11,000–$11,500 | 40–200+ |
| 24/7 In-Home Care | $20,000–$35,000+ | 1 (your parent(s)) |
Now that we understand all the different types of eldercare options, my $10,000 a month mental estimate is actually in the ball park after all.
The New Financial Quest: Save At Least $1 Million For Eldercare
After retiring in 2012, I thought I was done with my quest to make maximum money. My wife and I were open to being child-free, but we changed our minds and had not one but two children in expensive San Francisco. So I created a financial quest to build enough passive income to cover our higher family expenses.
Since then, I’ve layered on additional quests: fully funding 529 plans for both kids to match the cost of the most expensive private universities (~$400,000 each), opening custodial investment accounts, funding their Roth IRAs, and most recently, committing ~$500,000 to private AI venture funds to hedge against a rough future for them.
At 48, I genuinely thought I was done with financial quests. I’m tired and burned out, as I wrote in my 2026 New Year’s resolutions. All I want to do is relax and write my upcoming book, Your Children Will Be OK.
But that conversation at Diamond Head woke me up. I have four parents to potentially care for – my own parents (78 and 80, both medium healthy for now) and my wife’s parents (who have limited financial resources).
With eldercare running $150,000 to $230,000+ per year in Hawaii’s market, and with nobody else in a position to shoulder these costs, the math lands squarely on me.
I need to save and invest another $1+ million earmarked for eldercare. Oh boy.
Projected Eldercare Cost (for all four parents)
If I use the current estimate for a group home for one person at $230,000 today, that’s $920,000 total. If I assume the cost rises by 5% a year, here is what I’ll be expected to pay for four parents per year starting in 2031, five years from now.
- Year 5: $1,174,200
- Year 6: $1,232,892
- Year 7: $1,294,532
- Year 8: $1,359,300
- Year 9: $1,427,196
- Year 10: $1,498,588
- Year 11: $1,573,476
- Year 12: $1,652,228
- Year 13: $1,734,844
- Year 14: $1,821,508
- Year 15: $1,912,588
There Is Nobody Coming To Save You Or Your Parents
I don’t want to fund this alone, but I have to be realistic about who can contribute.
My wife’s parents are poor. Her father lives in a cabin in the woods in West Virginia; her mother still carries a large mortgage relative to her home in Charlottesville, which should have been paid off 15 years ago. We already send them money each year to help make ends meet.
My sister has some assets from her previous marriage, but she’s an artist making modest income and lives far away in New York City. I can’t count on her to research Hawaii eldercare options or make meaningful financial contributions.
My parents have pensions from three decades in the foreign service, but their pensions won’t come close to covering $216,000+ a year in eldercare costs for one person, let alone $432,000+ for both of them.
Mom has generously given much of her wealth to fund the kids’ 529 plans. Dad has the house his parents left him and a stock portfolio of unknown size. Maybe he’ll tell me the balance after he reads this post.
The financial responsibility rests largely on me, and I feel like my foundation is beginning to crack from the weight of it all.
My Plan To Save At Least $1 Million For Eldercare
This new financial quest requires a clear-eyed look at the timeline, the income sources I have available, and a realistic savings and investment strategy that doesn’t require me to come out of FIRE retirement.
Step 1: Estimate the Timeline
I’m guessing with 70% probability I have at least 5 years for three parents, and a 30% probability for one parent before either parent needs significant eldercare. I also estimate there is a with 55% probability I have 10 years.
I also plan to return to Hawaii permanently in 2029 to care for them and help coordinate professional care. My hands-on involvement, supplemented with part-time professional support, could cover at least a year or two of needs from passive income.
That gives me roughly a 5-to-10-year runway to accumulate.
Step 2: Estimate the Target Amount Needed
For four parents, here’s a rough framework:
- My parents (2 people in Hawaii): I estimate they have eight-to-ten years before they need professional help. By then, the cost per person will be $340,000 – $390,000 per person, or $680,000 – $780,000 a year. Therefore, I need to plan for around three times that amount, or $2,040,000 – $2,340,000.
- In-laws (2 people in W. Virginia / Virginia): I estimate they have five-to-eight years before needing professional help. By then, the cost per person will likely be around $170,000 – $195,000 per person, or $340,000 – $585,000 a year. If I multiply by three, $1,020,000 – $1,755,000.
- Total realistic cost for four: ~$3,060,000 – $4,095,000
The average time of stay at an eldercare facility can run from 2-3 years, but up to 5 years. Therefore, I multiple the yearly estimated costs by three to five.
Here’s the most conservative math if all four parents go to a small group home facility that costs $18,000 a month in today’s dollars.
- Three to five year cost of eldercare for four people starting in 2031: $3,522,600 – $5,871,000
- Three to five year cost of eldercare for four people starting in 2032: $3,698,676 – $6,164,460
- Three to five year cost of eldercare for four people starting in 2033: $3,883,596 – $6,472,660
- Three to five year cost of eldercare for four people starting in 2034: $4,077,900 – $6,796,500
- Three to five year cost of eldercare for four people starting in 2035: $4,281,588 – $7,135,980
- Three to five year cost of eldercare for four people starting in 2036: $4,495,764 – $7,492,940
- Three to five year cost of eldercare for four people starting in 2037: $4,720,428 – $7,867,380
- Three to five year cost of eldercare for four people starting in 2038: $4,956,684 – $8,261,140
- Three to five year cost of eldercare for four people starting in 2039: $5,204,532 – $8,674,220
- Three to five year cost of eldercare for four people starting in 2040: $5,464,524 – $9,107,540
- Three to five year cost of eldercare for four people starting in 2041: $5,737,764 – $9,562,940
Step 3: Know Your Income Streams — and What They Can Bear
As someone who is FIRE with no day job, and a wife who also doesn’t work a traditional job, my income sources are:
- Passive investment income (dividends, interest, real estate distributions)
- Book income (advance, potential royalties)
- Financial Samurai advertising and partnership income (more difficult as AI changes the way people search)
Sadly, $1 million saved for eldercare will likely be short since the low-end estimate I have is $3,060,000. But I’ve got to start somewhere and try, so $1 million is the initial target.
I need to direct a portion of my income toward a dedicated eldercare fund consistently over 5-10 years. There is a chance that in 5-10 years, I’ll also have excess passive income that will help pay. Here’s a framework:
| Savings Period | Annual Savings Target | Total Accumulated (w/ 7% avg return) |
|---|---|---|
| 5 years | ~$150,000/yr | ~$870,000 |
| 7 years | ~$110,000/yr | ~$990,000 |
| 10 years | ~$80,000/yr | ~$1,100,000 |
The 7% assumed return is realistic for a diversified portfolio of stocks, bonds, and real estate investments.
Step 4: Where to Invest the Eldercare Fund
This isn’t a 529 with tax advantages, or a retirement account with contribution limits. It’s an ordinary taxable account, which means flexibility is my friend. I can access the money whenever needed.
The recommended allocation for a 5–10 year eldercare fund:
- 60% – 70% in diversified equities (broad index funds): The long end of the window gives you time for growth. S&P 500 index funds or a global index fund work well.
- 20% in real estate income / REITs / private real estate funds: Real estate provides inflation-hedged income and can help cover eldercare costs in real-time rather than waiting to liquidate equities.
- 10–20% in short/medium bonds or high-yield savings: The cushion. As eldercare needs become more imminent, more of the portfolio will shift here.
For my eldercare fund, I will definitely not invest in illiquid traditional venture capital funds with a 10-year payback window. This is not speculative money. It needs to be deployable within a few years.
Be Conservative With Your Assumptions
These represent realistic conservative financial scenarios where I’m responsible for covering care for four parents for three-to-five years in a high-quality group home setting with 5–8 residents in an expensive state.
At this level of expense, there’s no way I can save and earn enough to fully fund it through income alone. I’d have to go back to work in a senior capacity at the next hot AI startup to have a chance.
But I don’t need to save up the full cost of eldercare for four parents in 5-10 years because I should be able to grow my passive investment income to pay at least a portion as I go. Although, I’m also being crunched by the cost of independent grade school tuition over the next 9-12 years. At least college is already account for with 529 plans.
More realistically, the only viable option would be to sell a significant portion of my assets. I could do it, but there would be tremendous tax liability and a big setback in supporting my children.
It’s a real mindbender. You want to give your parents the best possible care in their final years, without bankrupting yourself or shortchanging your children, who hopefully have decades of life ahead of them.
Step 5: Use Parental Assets Smartly
Before writing a check for eldercare, I will help my parents (and in-laws, where possible) structure their own assets:
- Long-term care insurance: Likely too expensive to purchase at 78-80 years old, and underwriting will probably decline them. But worth a call to confirm. Please understand there are many conditions in place to have long-term care insurance pay out. These include getting written confirmation from a doctor saying the patient can’t do at least two of the basic functions of living – can’t feed, cloth, bathe, transfer themselves. Then once that is approved, there is a 90-100 day grace period before payment starts. In other words, the long-term care insurance you’ve been paying might not even pay out when you need it. Get your parent’s primary care physician and long-term care insurance provider contact information now.
- Home equity: A reverse mortgage or eventual sale can fund years of care. This requires an honest family conversation, but it’s real money on the table.
- Pension/Social Security optimization: Even if pensions can’t cover full eldercare costs, $2,000–$10,000/month in pension income offsets what you need to provide. Social Security may pay up to 30 days for for long-term care while you’re in the grace period.
- Gifting rules and Medicaid: Depending on my parent’s assets, Medicaid can eventually step in to fund nursing home care. But the rules around asset transfers are complex and vary by state. I’ll need to consult an elder law attorney before any major money moves.
- State services: There are state services that will pay you to be the caregiver, instead of a professional. In California, it’s called IHSS and in Honolulu, it’s called The Institute for Human Services. The median pay is about $50,000, which isn’t huge. But at least it’s something and you don’t have to pay someone else for eldercare. I’m going to apply to this program when the time comes.
Staying Motivated Without Burning Out
The idea of grinding for another decade doesn’t excite me the way it used to. But I’ve got a new purpose of taking care of my parents to help me reach this new financial quest.
The goal isn’t to maximize every dollar or squeeze out every last basis point of return. The goal is to build a dedicated safety net so that when the time comes, I can get my parents and in-laws the care they deserve without financial stress or panic.
To keep myself sane and motivated, I keep coming back to a few principles.
First, I need to protect my energy. Running Financial Samurai is still my most consistent and reliable lever for supplemental retirement income. But I’ve learned that forcing content just to “produce” is a fast track to burnout. I write about what genuinely interests me now. Eldercare. The reality of FIRE. The emotional burden of being the one responsible for the household finances. The more honest and personal the writing, the better it performs anyway.
Second, I treat book income as a bonus, not a crutch. I plan to earmark 100% of Your Children Will Be OK book income directly toward this eldercare fund. It’s not a lot, but it makes a dent toward eldercare cost. Unfortunately, I think I only have one last book in me.
Third, I need to continue to invest well, and hopefully outperform the market. But wrong investment move could set me back years. The importance of being a competent investor has never been greater for me today.
Finally, I refuse to let this become an everyday mental burden. I’ll check in on the plan once a year. I’ll review the balance, adjust the allocation if needed, and reassess the timeline based on my parents’ health. Then I move on.
Because if I think about this every single day, I’ll burn out long before I ever reach the finish line.
The FIRE Reality Check Nobody Told You About
If you’re thinking about FIREmu, please model your future expenses carefully. I didn’t forecast having two kids in San Francisco, which led me to scramble more than I wanted to. I didn’t forecast $3-$5 million in eldercare obligations either. These missed calculations are now causing a tremendous challenge for me, right at a time when I want to relax.
Build a generous buffer. Maintain income streams that can flex up when needed, not just down. And don’t be too proud to go back to work if necessary. People are depending on you.
The $18,000/month conversation at the pickleball courts was an expensive lesson. I’m grateful I got it now, while there’s still time to prepare.
What about you? Have you started planning for your parents’ eldercare costs? How do regular people afford millions of dollars to afford eldercare for their sick parents? If you’ve had to take care of your elderly parents, how did you do it in a cost-effective way that also provided great love and care?
Protect Your Family With Affordable Life Insurance
One of the simplest ways to reduce financial stress during life’s most difficult moments is to have the right life insurance in place.
My wife and I got matching 20-year term life insurance policies through Policygenius. Once we secured coverage, the sense of relief was immediate. No matter what happens to us, we know our children will be financially supported.
When you’re thinking about eldercare costs, college tuition, and everything in between, life insurance becomes less of a “nice to have” and more of a financial backstop. It ensures that one unexpected event doesn’t derail everything you’ve worked so hard to build.
Read the full article here