Retirement planning is often on the minds of millions of Americans, especially as they move toward and through their 50s and into their 60s. Unfortunately, many Americans are woefully unprepared for their retirement years, often because they spend much of their working years living paycheck to paycheck. According to some estimates, 78% of full-time working adults in the United States are living paycheck to paycheck (CNBC).
What many of these Americans fail to realize is the potential cost of long-term care. There are numerous types of long-term care a citizen might require at some point in their future, including nursing home, assisted living, and in-home care services.
This is one of the reasons more financial advisors are recommending their clients pay attention to and account for these potentially unexpected retirement expenses. In fact, according to statistics, seniors will face a greater than two thirds chance of requiring some type of long-term care in their future. Not planning for this means the potential for financial ruin when they can least afford it.
As noted in the CNBC article, Advisors create a game plan to prepare clients for this retirement expense, written by Sarah O’Brien:
“Someone turning 65 today faces a nearly 70% chance of needing LTC services during their remaining years, according to the U.S. Health and Human Services Department. On average, women need care longer (3.7 years) than men (2.2 years).
Related monthly costs can be eye-popping: a median $4,000 for care at an assisted-living facility ($48,000 yearly), $7,400 for a semi-private room in a nursing home ($89,000 a year), $4,200 for a home health aide ($50,400 annually) and $4,000 for homemaker services ($48,000 a year).”
Home care remains the most affordable long–term care option, but even for those seniors who don’t plan properly, the cost of this can be devastating. This is one of the primary reasons more financial advisors are taking a vested interest in encouraging their clients to plan on the prospect of some type of long-term care in their future.
Long-term care insurance can certainly be a valuable investment for people in their 50s and early 60s, but the longer they wait to begin a policy, the greater the risk of being denied or the higher the monthly premium might be.
Home care agencies also have a great opportunity through this to reach out to their local communities and provide information, perhaps teaming up with local advisors to help more people become aware of what the future could hold and how to be better protected financially.