The retirement savings of America's baby boomer generation are being rapidly depleted by elder care costs. Conrad Miles, who had saved about $200,000 for retirement and received a railroad pension, had only about $30,000 left in his account when he died at age 93.
The savings melted away in an instant after he entered a care facility, an amount that would not have covered even a few months of living expenses had he still been alive, his daughter Marion Miles said. Such cases are no longer exceptions but a trend.
On the 23rd, The Washington Post (WP) analyzed data from the federal government's Health and Retirement Study and reported that most of the wealth baby boomers intended to pass on is being scattered into elder care costs.
The survey is a long-term study that has tracked tens of thousands of Americans every two years, from their early 50s until death, since 1992. From those, the WP selected thousands who died between 2006 and 2022 and examined how out-of-pocket care spending in the final decade of life changed household wealth. The conclusion was clear. A significant portion of the money meant to be passed down flowed out as care costs, and for some families, savings did not merely shrink but disappeared entirely.
Instead of receiving inheritances, the children's generation is dipping into their own savings to cover their parents' care costs. Medical and care expenses spent over the final decade totaled a median of $19,179 (approximately 28,131,957 won). One in six exceeded $50,000, and one in 20 topped $100,000. The gap by class was stark. In the bottom 20% by income, 41% were left penniless after paying care costs, with spending amounting to one-third of their assets. The top 20% needed to spend only 1.5% of their assets over the same period. Experts said that if housing costs are included, the actual burden is far greater.
The decisive blow that increases the burden is facility admission. As of 2025, the median annual cost of basic services for a private room soared to about $74,400 (approximately 109.12 million won), and a private room in a nursing home reached $129,575 (approximately 189.96 million won). If a dementia patient spends seven years in a nursing home, the total approaches $1 million. Economic policy researcher Jessica Forden said, "Because of long-term care costs, people spend all their assets, leaving almost nothing to pass on to the next generation." She added, "The expectation that large inheritances will change hands is closer to a misconception. Inheritance is a story for the very top, while the rest exhaust their wealth on retirement and care costs and end up disposing of even what remains in order to qualify for Medicaid."
The root of the cost surge lies in demographic and family structure changes. As the number of children declines and families scatter across multiple locations, care is entrusted to outside hands, and as medical technology allows chronic diseases to be managed for longer, the care period itself has lengthened. Nursing facility costs have jumped 44% over the past five years, double the rate of inflation. The large baby boomer population simultaneously pushes up both demand and labor costs.
The last place families who run out of money reach for is Medicaid. It is a care-cost assistance program for low-income individuals with bank balances of $2,000 or less. The problem is the price. Since 1993, federal law has required state governments to recover long-term care costs paid on behalf of the deceased by seizing their assets after death, particularly homes, but few are aware of this. Marlene Klein, who lost her mother (age 97) last year, worried that her brother might become a target for recovery because of a jointly owned home. Having handled Medicaid asset recovery work in Idaho, she understood the intent of the system but pointed out, "Care costs are so exorbitant that people have no choice but to rely on Medicaid, only to end up losing their homes." She added, "In a wealthy country, forcing such a cruel choice on the elderly and their families is unjust."
