The Washington Post recently published an article claiming that the great majority of Americans think (incorrectly) that their family will provide their care when they are old.
First of all, 60 percent of adults between 40 and 65 don’t think they will ever need any long term care (LTC). The Health and Human Services office in Washington DC tells us that 70% of us will need such care. 20% for between two and five years and 20% for more than 5 years.
Fortunately, only about 15% is done in nursing homes (at a typical cost of just over $100,000 a year). The great majority of LTC is provided in your own home or in the assisted living type facilities, at about half the cost of nursing homes.
“A major reason people are too optimistic is that they think their families will take care of them. Almost 75 percent expect their families will provide long-term care, which was about seven times more than those expecting to need a home health agency, nursing facility or assisted living facility, according to the Health Affairs study, which analyzed responses from the 2012 National Health Interview Survey. People in the survey were asked to say who they expect would provide long-term care, even if they didn’t think they needed it.”
The Health Affairs study also warned that the 29 percent of people ages 40-65 who live alone could have the greatest needs for long-term care. They had the worst health of any group in the survey, were much less likely to rely on family to provide care and had the greatest expectation of any group that they’d need to pay for long-term care services, according to the University of Minnesota researchers who authored the study.
Ozzie and Harriet lived in the 1950’s and into the 1960’s. Harriet stayed home, wearing a dress, heels, and a pearl necklace. She had the time, space, and energy to have parents or in-laws move in and provide their care. How many of you have children who stay home wearing dress, heels, and pearl necklace with the time, energy and finances to provide all of your care? I didn’t think so!
LTC insurance does not need to be expensive – if chosen appropriately. There are many options, and knowledgeable guidance can help greatly. Just as you might not invest based on your barbers advice while getting a haircut, seeking out a specialist in the financing of LTC can result in custom tailoring coverage to the risks you wish to cover, and no more.
One universal piece of advice to consider is the impact of inflation. Numerous recent articles have stated that the costs of LTC have only increased an average of 3%/year during the past 5 years. This is correct, and the past 5 years have been the worst recession since the great depression of the 1920’s. Minimum wage is set to increase legislatively, employment is picking up and who will fill the workers slots at minimum wage going forward? A recent New York Times article stated that professional caregiving will overtake retail as the number one profession in America in just 5 years. We did not have enough children to provide our care! Costs will increase more than 3%, and 5% is the best inflation hedge we have. it is absolutely essential!
More information can be found at www.TheLongTermCareGuy.com