A majority of Americans are ill-prepared for their long-term care needs as they age, as a new report shows many have not considered the costs of long-term care down the road.
Barely more than a quarter (27%) of Americans age 40 and older are confident they will have the financial resources to pay for their long-term care needs, according to a report from The SCAN Foundation.
Conversely, about two-thirds (65%) of Americans say they have done little or no planning, or have set aside money for long-term care expenses.
Regardless of income level, many Americans are still unprepared to tackle long-term care head on.
Among those with incomes more than $100,000 a year, only 53% say they have set money aside to help cover long-term care needs, and just 17% have long-term care insurance.
The figures are even smaller among those with less income,
For those with earning less than $50,000, just 22% say they have set aside money for living assistance as they age, while 7% report owning long-term care insurance.
An independent non-profit public charity, The SCAN Foundation aims to establish pathways to planning for long-term care by evaluating the motivators of preparing for aging needs.
Not knowing where to get information on aging issues is one of the three key factors in the study for why Americans don’t plan for their long-term care needs.
People who feel they know where to get information are more likely than others—by double-digit margins—to be prepared for future needs, according to the report.
Also a factor when it comes to planning, those who have provided or received long-term care assistance (57% overall) report significantly more planning for their aging than others. Study researchers expect that with increasing numbers of Americans providing such care, planning may rise in tandem.
Simple avoidance of the aging subject is another strong contributor to financial unpreparedness in The SCAN Foundation report, with three in 10 Americans age 40 and older saying that growing older is something they “just don’t want to talk about.”
These three factors stand out, especially as planning for long-term care has become critical given certain demographic trends in the U.S, such as the age 65 and older population that is expected to reach 75.1 million by 2030, and the rising rate of those who will require nursing home care.
These trends, compounded with estimates that seven in 10 Americans older than 65 will require long-term care for an average of three years, highlight the importance for early planning, even if the subject might not be pleasant to some.
“This work shows that Americans are not talking about the care they will likely need as they age, and that is a serious concern,” said Bruce Chernoff, MD, president and CEO of The SCAN Foundation. “American families need to start having early conversations about future finances and care plans, so that there is plenty of time to prepare, review and act on one’s options.”
Written by Jason Oliva