Adults 50+ Think They May Need Assistance When Older - Few Have Done Much About It
Thirty years ago, if someone talked to you about long-term care, often they would respond that they don't need help with lawn care. That's right, lawn care - the words' long-term care' was not in most people's vocabulary.
Today most people are aware of the issues related to aging and how the consequences that long-term health care can have on families and finances. The COVID-19 virus crisis highlighted this problem as older people were impacted more than others.
AARP Long-Term Care Readiness Survey
AARP surveyed 1,011 U.S. adults aged 50 and older to determine the level of readiness for long-term health care and aging. There seems to be a great awareness of the problem, but that is about it.
The AARP released the results of their research, showing that nearly seven in ten believe that they will need assistance with their daily activities as they age. Yet, fewer than three in ten have given 'a lot of thought' to how they will continue to live independently when they need assistance.
Even though traditional health insurance, including Medicare, pays little to nothing toward most long-term care services, about half of the adults 50-plus in AARP's recent survey believed that Medicare covers care in a nursing home or care in their own home from a home health aide.
People Don't Want to Burden Loved Ones
Despite a lack of planning, most people responded they don't want to be a burden on their loved ones. One of the two top concerns that people have are not becoming a strain or burden on their families.
The other top concern is not being able to continue to live independently. These were the two top concerns noted by roughly six in ten adults 50-plus. Slightly fewer say they are concerned about not having enough money saved, needing to live in a nursing home or assisted living facility, or not being able to remain in their own home.
Only 28% of the respondents indicated that it was unlikely that they would need help with daily living activities, and 3% said there was no chance they would ever need assistance when they get older.
Less Denial with Age
Denial of potential need is less for those aged 50 to 64 and increases for those 65 and older. A vast majority of the respondents have yet to purchase Long-Term Care Insurance.
Only LTC Insurance and Medicaid will pay for long-term health care. Medicaid requires an individual to have little or no income or assets to qualify for benefits. Long-Term Care Insurance is medically underwritten, so you must have reasonably good health to obtain coverage.
Only half the respondents have discussed their end-of-life plans with family and have written a will. The lack of planning places the burden on loved ones and puts the full responsibility of paying for professional care on themselves.
Unpaid Family Caregivers Untrained and Unprepared
There are 53 million unpaid family caregivers in the United States, according to a 2020 AARP study. Family caregivers are usually untrained and unprepared for this demanding job.
The goal for most people is to live and thrive independently. As we age, we experience declining health and mobility problems, making that difficult or impossible. Family members often feel concerned about the safety and well-being of their aging parents. Home health care is beneficial, and professional caregivers are trained to provide care. However, family caregivers find it hard to keep up.
Danielle Myers from Status Solutions, a senior living technology company, says seniors are at risk for serious safety concerns. She says time is of the essence when a senior is unsupervised and falls at home. With today's technology, automatic alerts can be sent directly to caregivers, family, and emergency contacts, decreasing response times.
Professional Long-Term Health Care is Expensive
The AARP study did not ask about the Long-Term Care Insurance Partnership program. The partnership program, available in most states, offers additional dollar-for-dollar asset protection if you own a qualified LTC Insurance policy. Not surprisingly, few people, including financial professionals, are aware of this program.
While it can be assumed most people won't like purchasing insurance, the only other solution for future long-term health care is either self-funding or family caregivers. Neither option is attractive and creates stress on loved ones and financial pressure. Medicaid is available if someone has little or no income and assets but is not a solution for anyone else.
Since premiums can vary over 100% between insurance companies, be sure to seek the assistance of a qualified Long-Term Care Insurance specialist that works with the top companies. Premiums are regulated. Every insurance company must file its products and premiums with each state's insurance department. No individual agent, agency, or advisor can offer special deals.
Experts say the best time to purchase Long-Term Care Insurance is when you are in your 50s, when premiums are lower and better health allows for more options - How Much Does Long-Term Care Insurance Cost? | LTC News.
The consequences of aging affect everyone in your family. Long-term health care costs are rising sharply because of inflation, increasing labor costs, and higher demand for services. Costs vary depending on where you live, and the types of services you require - Cost of Care Calculator - Choose Your State | LTC News.
Economic Uncertainty Means Planning is Vital
Investors are concerned about their retirement assets. In a research survey conducted by Charles Schwab, while account holders have concerns, at the moment, they understand the need to stay the course.
Investors' concerns about the market are understandably on the rise this quarter amid inflation, the ongoing conflict in Ukraine, and volatility, but we're encouraged to see that they're staying the course with a focus on diversification and following their long-term financial plans.
Jonathan Craig, Managing Director, Head of Investor Services & Marketing at Charles Schwab.
Craig says that investors are also staying engaged during the current volatility. Economic uncertainty, inflation, and market fluctuations are reasons to have guarantees as they plan for retirement.
LTC Insurance Means Guarantees
Long-Term Care Insurance offers guarantees. LTC Insurance provides guaranteed tax-free benefits that give the policyholder access to their choice of quality care services, including care at home. Most research indicates that people will prefer to be at home and age in place when they start to need help with daily living activities or supervision due to dementia.
Most LTC Insurance offers inflation riders, so benefits increase as the cost of care increases. With most policies, these increases in benefits are factored into the premium. However, some companies use "purchase options" where the benefits go up, but your premium also goes up. Experts say to avoid those types of plans since the premium keeps increasing and will soon cost more than if you purchased the proper inflation benefit to start with.
Policies are similar because of federal and state regulations, but you should understand the major parts of these plans - Understanding the Major Parts of a Long-Term Care Insurance Policy | LTC News
In addition, federal regulations require specific inflation benefits, depending on your age, when you own a Partnership Long-Term Care Insurance policy.
Things change, your health changes, the economy changes, and you get older every year. While most people understand the problem with aging and the risk of future long-term health care, too many people want to put this off. Being prepared will safeguard income and assets, access to a choice of care services, and allow your loved ones the time to be family instead of becoming your caregiver.