This is a much quoted fact: A person turning 65 today has a 70% chance of needing long-term care in the future (LongTermCare.gov). That translates to 7 out of 10 people. Additionally:
- Women need care longer (3.7 years) than men (2.2 years)
- 20% of today’s 65 year-olds will need care for longer than 5 years
What is meant by long-term care? It includes assistance with basic life activities, like bathing, dressing, and eating. It also includes help with these tasks: transportation, grocery shopping, and housework.
Most of us are at risk of losing some physical and cognitive abilities as we age. Increasingly over time, this risk becomes more and more real. And for a growing number of us, this will result in our needing long-term care. To bring this help into the home, it is likely we will have to pay out of pocket. The cost varies widely but Genworth Financial (2021) states that daily median cost of non-medical in-home care is: $26.00 per hour or $59,488 per year.
Remember Medicare does not pay for long-term care. A few Medicare Advantage plans do include a home care aide for a short number of hours each month. But the majority of older adults rely on family or friends for long-term care needs. According to National Alliance for Caregiving and AARP, about 1 in 6 Americans provide care for someone 50 years old or older.
Even if you can afford long-term care, you’ll need even more funds for medical expenses. According to the Fidelity Retiree Health Cost Estimate…
A 65-year-old couple retiring in 2022 will need an average of $315,000 saved (after taxes) for medical costs during retirement.
Combine the cost of medical expenses with long-term care, and you can see why medical costs are one of the main reasons Americans file for bankruptcy.
For most of us, the real costs for long-term care are unknown and unpredictable. The distressing reality is that…
“The cost of long-term services and supports is more than what middle-income families can afford.”
(LongTermScoreCard.org)
A few states offer services in the form of transportation, home-delivered meals or in-home care visits through programs like PACE or Program of All-Inclusive Care for the Elderly. This is a Medicare and Medicaid program that helps people get care in the community instead of going to a nursing home or other care facility.
Unfortunately, there aren’t a lot of options in most states. Other than those with very deep pockets, paying for long-term care can quickly drain our savings, home equity and any number of other family assets. In our current eldercare system, we’ve made it unaffordable for the majority of us to grow old, regardless of where we call home.
