'That’s not a plan': Suze Orman says building $5M in retirement savings is not enough — you also need to protect it

You’d think having millions saved for retirement would be enough to cover just about anything. But Orman argues that retirement savings and long-term care insurance aren’t competing priorities. They actually work together.

Needing long-term care, whether for yourself or a loved one, can come with a hefty price tag. The cost depends on several factors, including where you live, how long you need care and the level of assistance required. The median annual cost of a private room in a nursing home in 2026 is $135,528, according to SeniorLiving.org.

Even a multimillion-dollar retirement portfolio can come under pressure if those expenses continue on for several years.

“That’s not a plan,” Orman wrote. “The plan is protection first then growth.”

The real cost of long-term care

Trent Von Ahsen, CFP and managing partner at Cedar Point Capital Partners, says the biggest financial risk of long-term care is how quickly it can deplete your savings.

“So imagine needing to withdraw an additional $150,000 or even $250,000 annually for several years, potentially during a significant market downturn. Those withdrawals could force the liquidation of investments at very unfavorable prices, accelerate taxes on retirement account distributions, and permanently reduce the portfolio available to support a surviving spouse,” he told Moneywise.

Many Americans aren’t even financially prepared for long-term care expenses. According to a 2022 KFF survey, 28% of adults ages 50 to 64 reported setting aside money for future assistance with daily living.

Consider a hypothetical scenario of a 50-year-old named Leslie, who has spent much of her career building a $2 million retirement portfolio with her husband. She’s in good health and figures they have enough saved to cover just about any unexpected expense. But what happens if Leslie needs long-term care at 75?

Using the 2026 median annual cost of $135,528 for a private nursing home room, and assuming costs rise by 3% annually, that same care could cost roughly $284,000 a year in 25 years.

Now, let’s say Leslie purchases a long-term care insurance policy at 50, paying $4,500 annually. By age 75, she would have spent $112,500 in premiums, assuming they never increase. That’s a substantial amount of money for insurance she may never use.

And since Leslie is married, there’s another consideration. Every dollar withdrawn from the couple’s retirement savings to pay for her care is money her husband may no longer have available to fund his own retirement.

How much protection do you really need?

Having millions saved for retirement doesn’t necessarily mean all that money is available to cover long-term care. Mary Ware, a senior wealth advisor and managing partner at Carnegie Private Wealth in North Carolina, says that’s why the decision to purchase long-term care insurance should depend on more than someone’s bank balance.

“Even with $5 million saved, you need to consider how much of that money is already earmarked for other needs,” Ware told Moneywise.