“Here are a few facts that we are facing today: our society is aging, people are living longer, and we are unprepared. The government is unprepared. Organizations are unprepared. Communities are unprepared. And families, most certainly, are unprepared.” LeadingAge president and CEO Katie Smith Sloan made this statement in 2018. Almost a year later, a new study reveals that these facts persist.
A Growing Urgency: Retirement Care Realities for Middle-Income Boomers found that more older adults are more financially prepared for death than the care they may need in life. While 81 percent of middle-income boomers have made at least one formal preparation for when they pass away, only 32 percent have a plan for how they will receive “care in retirement,” should they need it.
Lack of financial preparedness appears throughout the findings. Most respondents (79 percent) have no money set aside specifically for their long-term care needs. What’s more, very few have emergency savings of any kind: 30 percent have less than $1,000 saved.
“The U.S. Department of Health & Human Services estimates that boomers will face an average of $138,000 in long-term care costs over the course of their lifetime,” said Scott Goldberg, president of Bankers Life, whose Center for a Secure Retirement conducted the study. “Even if pre-retirees and boomers have taken steps to build a financial plan for their retirement income, they should not consider their plans complete until they discuss retirement care.”
Older Americans are not only unprepared to pay for long-term care services and supports, but they are also unaware of critical facts that could inform their planning.
Only about half of older adults in this study believe they will need care someday; but we know nearly 70 percent of Americas will actually need long-term care supports. Perhaps that’s why only 18 percent said care planning is a high or very high priority.
However they prioritize long-term care planning, respondents do not have a good sense of what the costs might be. According to the survey, 42 percent of middle-income boomers could not even guess at the cost of a home health aide, and 35 percent couldn’t provide an average monthly cost of nursing home care. And, in what is a persistent misunderstanding, 56 percent mistakenly believe that Medicare will pay for their ongoing long-term care.
For those of us working in the field of aging, these are not surprising findings–but they reinforce the critical need for action. The study found that one third of people without a care plan, say they need advice, but do not know who to trust. That’s where we come in.