COVID Affecting Retirement Planning According to Study
We have lived through some very uncertain times due to the COVID-19 virus crisis and its impact not only on health but also on our finances. A recent survey showed that 47% felt helpless, while 44% said they were at an emotional low point in the past year. More Americans are reporting problems with anxiety, depression, and loneliness.
Given the global uncertainty, it would not be surprising if many people put off making important decisions. Planning for your retirement would be one of the most important things to prepare for as you get into middle age. If you are over age 40 you should be in high gear for retirement planning.
Still Saving Money?
Retirement planning would include saving money in retirement accounts like an employer's 401(k) or similar type of qualified savings vehicle. Your job status might be slowing down your savings for retirement, but it should be a priority because, at some point, you will retire.
Planning for future health care costs, including long-term care, should also be a high priority to protect those retirement savings.
However, a recent study conducted by Edward Jones and Age Wave indicates that one in three Americans have decided to delay their retirement due to the virus crisis. The effects of unemployment and lost savings that occurred during the pandemic are the primary reasons people are delaying their retirement.
High Anxiety About Aging and Long-Term Health Care
The study shows that people aged 50 and older are concerned about unexpected expenses that would adversely impact their retirement savings. Sixty-six percent point out long-term care and other health-related expenses as a significant concern.
Plus, fewer people are contributing to retirement accounts, forcing many people to delay their retirement altogether. Read more from Fortune here.
You cannot time market corrections, nor can you predict unexpected events by a pandemic. You also never know when you will encounter changes with your health, body, or mind that will require you to need long-term health care services.
LTC Costs Growing
The costs of long-term health care continue to grow as demand increases and labor costs go up. The LTC NEWS Cost of Care Calculator can show you these costs for both today and in the future. You can narrow down the costs on where you live or expect to live in the future, as care costs vary depending on location.
For example, in Boston, the average cost of in-home health care, based on a 44-hour work schedule, runs about $65,000 a year - today. However, in twenty-five years, that same amount of in-home care will run you about $125,000 a year. Facilities (assisted living, memory care, and nursing homes) will cost more.
If you live in Albuquerque, New Mexico, you will see a lower cost of long-term care. The same amount of in-home that runs $65,000 in Boston will only cost around $52,000 in Albuquerque. These costs will increase as well in the decades ahead.
Affordable LTC Insurance Helps
Including affordable Long-Term Care Insurance in your retirement plan will be an essential part of a successful overall plan. Whatever money you save for your retirement must be protected; otherwise, you will either use your own money to pay for professional care, or your family will be forced to become caregivers. Your loved ones are unprepared and untrained for that burdensome role.
Despite the consequences of an ever-changing economy and the virus crisis, planning for retirement and long-term health care remain critical for your future.
The best time to shop for LTC Insurance is before retirement, ideally in your 40s or 50s. Delaying will only cause more anxiety later in life. Be sure to seek a licensed and qualified Long-Term Care Insurance specialist to match you with the best coverage at the best value.