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As America Ages, Long-Term Care Costs Could Overwhelm Most Families

The number of Americans age 65 and older is on track to double — from 46 million now to over 98 million in 2060, when today’s 20-somethings will be turning 65. At that time the 65-plus age group’s share of the population will have jumped to 24-percent from 15-percent today.  One in four of us will be in the older group, at high risk of needing long-term care.

The concerning statistics are from “Aging in the United States,” a study published by the Population Reference Bureau (PRB).

The proliferation of older Americans places a big burden right now on all breadwinners in their prime productive years (20 through 65). According to the PRB, by 2030 there will be only 2.8 working-age adults for every person 65 and older, down from 5.0 in 2000.  Because of this, today’s working-age citizens, now building our economy and their own economic futures, will be hit by a double-whammy.

The first part of the double-whammy has to do with one’s aging parents. According to the U.S. Department of Health and Human services, almost three in four aging Americans will need some form of long-term care after 65. For a working couple with two sets of parents, the odds of financial impact are very high, if any of the parents lacks the resources for their own care.  The second part of the double-whammy is that the younger couple may need long-term care services themselves at some point. After dealing with mom and dad, they’ll need to be ready to care for one another; or to pay professionals to do it.

Long-term care services can be expensive, costing from tens of thousands to $100,000, $200,000 or even more per year, depending on location, type of services, and type of claim. Multiply that by the number of family members needing care, and the cost can become prohibitive.  There is also a severe shortage of caregivers today, which will only get worse over time.  Who wants to do this work for minimum wage and often, no benefits?  The push for a higher minimum wage will raise LTC costs even faster.

But the financial impact extends beyond care costs. It often involves income loss from interrupted employment as well. According to a study by the MetLife Mature Market Institute, America’s 10 million employed caregivers face $3 trillion in lifetime losses for missed pay, pensions, and social security. Long-term care has always been expensive and a key cause of impoverishment in one’s later years.  As America ages, the cost challenge promises to increase.

What can be done about it?  There are solutions available now for most any situation, wealthy or poor as a church mouse, healthy or not able to walk anymore. The key is to develop a long-term care plan.  It’s especially important for today’s younger, productive couples. It’s the only way to control costs and head off avoidable threats to one’s income, assets, lifestyle, and future.

Long-term care planning can be done independently but for good advice consult someone who specializes in this type of planning. The process is emotional and the options and pitfalls are vast. You need a calm, collected professional, someone who knows the local costs, and can help you understand how your spending on fun, travel, toys, golf, etc., will change when care is needed.

At TheLongTermCareGuy.com, LTC planning is all we do.  We can help you if you are already in care and spending down, we can help you if you have been declined for LTC insurance previously.  We have access to more products and strategies than generalists do.  Call us at (920) 884-3030 to schedule a time to investigate for yourself.

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The Long Term Care Guy