Planning for potential long-term care (LTC) expenses is an important part of many retirement plans. Because long-term care needs vary widely from person to person, MaxiFi does not assume a one-size-fits-all cost. Instead, the software gives you flexible tools to model these expenses in ways that best match your expectations and planning goals.

Below are the recommended approaches for modeling future long-term care costs in MaxiFi.

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Option 1: Use Future Special Expenses (Most Common)

The most straightforward way to model long-term care is by creating future Special Expenses.

How this works

  • Add a Special Expense starting in the year you expect long-term care to begin.

  • Set the annual cost, typically in today's dollars to assume the costs will grow with inflation each year, otherwise, nominal. 

    • If these costs are reimbursed by LTC policy, enter a corresponding set of Special Receipts. 

  • Specify the number of years the expense should last.

MaxiFi will automatically:

  • Inflate the expense appropriately

  • Include it in your lifetime spending analysis

  • Reflect the impact on taxes, assets, and discretionary spending

This approach works well when you want to model:

  • In-home care

  • Assisted living costs

  • Nursing care for a defined period of time

Option 2: Model a Change of Home (Assisted Living / Facility Move)

Some users prefer to model long-term care as a change in housing situation, especially if they expect to move into an assisted living facility or similar arrangement.

How this works

You can:

  • Sell your current home at the expected future date

  • Create a new home marked as rented

  • Represent ongoing facility costs as rent

  • Add any one-time entry fees as a Special Expense

This approach is useful if:

  • Housing costs will replace other expenses

  • You want to explicitly model selling a home

  • Facility living significantly changes your expenses

Which Method Is “Best”?

There is no single “correct” way to model long-term care — the best approach depends on:

  • Whether care is expected at home or in a facility

  • Whether housing changes are involved

  • How explicit you want the modeling to be

What matters most is that:

  • Costs are entered realistically

  • Timing reflects your expectations

  • The plan remains understandable and useable to you

Important Notes

  • Long-term care costs should generally be entered in today’s dollars

  • MaxiFi will handle inflation and tax interactions automatically

  • You can always revise or remove these assumptions as your plans change

If you’re unsure which approach fits your situation best, reviewing results under different assumptions and Alternative Plans can be a helpful planning exercise.

Need More Help?

If you’d like help reviewing how these assumptions affect your plan: