A 2010 survey conducted among U.S. adult consumers by Age Wave/ Harris Interactive and sponsored by Genworth Financial reported that the vast majority of Americans acknowledge the importance of long-term care expense planning. Not much has changed over the years.
Assessing The Risk
Most individuals underestimate the risk of needing long-term care. The government projections for decades have been that by the time we reach age 65 that 70% of us will experience a long-term care event. Yet when asked most assess the risk at 37%.
Research conducted by Columbia University, AARP and the American Council of Life Insurers reports that most people over age 50 are concerned that they will have enough money in retirement. Pre-retirees, those aged 55 to 65, are more risk averse than younger investors. Retirees are focused on preservation of capital and five times more risk averse than younger investors.
Yet, according to the Congressional Research Service 2022: “Who Pays for Long-Term Services and Supports,” only 8% of long-term care expense is paid with private insurance. Medicaid remains the primary funder of long-term care in the country.
Have The Conversation
Although long-term care is top of mind and insurance is an asset and income preservation strategy, most Americans have not even discussed long-term care with family members. The Age Wave survey reported that 65% of responders said they had not brought up the subject with family because it would be upsetting, 92% of spouses or partners had not discussed the three key topics outlined below and 95% of parents had not discussed the key topics with their adult children.
To help get these important conversations started, Age Wave’s Ken Dychtwald, PhD and an expert on aging, health and retirement, suggests three key topics for family discussions:
- Preferred care options and associated costs
- Roles and responsibilities of family members overseeing the care
- How will the care be funded
We have written about the importance of this family discussion and what to observe as you gather for holiday events. We think “The Conversation: It’s That Time of Year Again,” written by Robert B. Fleming of Fleming & Curti, PLC, is an enjoyable read and sets the right tone about this important topic.
I’m thankful for industry peers like Robert who bring thoughtful resources to the forefront. Have the conversation with your loved ones and get started on your plan today!
