Are You Prepared for This Looming Retirement Expense?

Photo by Monkey Business Images / Shutterstock.com

Everyone needs some level of medical care during retirement. But one type of care — long-term care — generates widespread confusion, according to a new survey by The Associated Press-NORC Center for Public Affairs Research.

Some Americans gamble by assuming they won’t require professional long-term care. Others expect to need it, but have varying opinions about who should cover the expense — with few Americans preparing to fund their own care.

The number of seniors in America is swelling. As of 2014, there were some 46 million Americans over age 64, according to the Associated Press. By 2060, there will be an estimated 98 million seniors.

The majority of those seniors will need at least some long-term care.

What exactly is long-term care?

Long-term care is not the same as medical care. It entails help with everyday tasks such as bathing, cooking and remembering to take medications.

The main options for long-term care include moving into a nursing home or assisted living community, or hiring an aide to provide in-home support.

Long-term care costs are generally also separate from — and in addition to — medical care costs.

Fidelity Investments estimated last year that the average 65-year-old couple who retired in 2016 would need about $260,000 to pay for lifetime medical expenses. That amount would go toward costs like health insurance premiums and co-payments and out-of-pocket medical expenses.

The couple would need an additional $130,000 for long-term care expenses.

The AP reports that about 3 in 4 Americans ages 40 and older have misperceptions about long-term care costs, however. Notably, they tend to underestimate the cost of nursing home care. And it is more expensive than care from assisted living communities or in-home aides, with long-term care costs ranging from $6,000 to $8,000 per month.

Who covers long-term care costs?

One way to cover the cost of long-term care is to buy long-term care insurance. Money Talks News founder Stacy Johnson details the pros and cons of it, as well as who needs to buy it, in “Ask Stacy: Should I Buy Long-Term Care Insurance?

Medicare, the federally subsidized health insurance program for seniors, does not cover the cost of most care received from nursing homes, assisted living facilities, or home health care aides.

So, without long-term care insurance, seniors may be left to tap retirement savings or burden family. Few seniors seem aware of this, however. Consider these findings from the AP-NORC survey:

  • 57 percent of Americans over age 39 expect to rely on Medicare quite a bit, or completely, for ongoing living assistance.
  • Over half of older Americans expect to rely heavily on Social Security to cover long-term care costs. However, the average Social Security payment is only $1,348 per month.
  • Only 16 percent of older Americans expect to rely on long-term care insurance.

To make matters worse, few older Americans plan for their ongoing assistance needs. For example, the survey found that two-thirds of them have done no planning or only a little planning.

Depending on your age and financial situation, it might be time to look at long-term care insurance. As we point out in “Retirement Is Coming — Make These Money Moves in Your 50s,” it’s a purchase best made by sometime in your 50s:

“If you are going to buy long-term care insurance, which pays some or most costs should you become unable to care for yourself, your 50s are the years to do it. Wait much longer and premiums become prohibitively expensive. Also, you could develop health problems that could disqualify you for coverage.”

So how much planning have you done to cover your long-term care in retirement? Let us know below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
13 Affordable Products for a Better Night’s Rest
13 Affordable Products for a Better Night’s Rest

These Amazon products can help you finally catch 40 winks — or more.

The Worst Nursing Homes in America Are Revealed
The Worst Nursing Homes in America Are Revealed

The nursing homes with a history of providing subpar care previously hadn’t been identified for a government list.

5 Ways to Put an End to Junk Mail
5 Ways to Put an End to Junk Mail

Here’s how to keep unwanted mail from clogging your mailbox and trash can.

10 Common Expenses That Have Skyrocketed for Seniors
10 Common Expenses That Have Skyrocketed for Seniors

Retirees must stretch their dollars further and further these days — no thanks to these costs.

The 5 Worst Home Upgrades for the Money
The 5 Worst Home Upgrades for the Money

These home improvement projects basically never pay off.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
10 Things Frugal People Never Buy
10 Things Frugal People Never Buy

If you’re a true tightwad, the mere thought of spending money on these items gives you the willies.

10 Useless Purchases You Need to Stop Making
10 Useless Purchases You Need to Stop Making

You might as well flush your money down the loo if you spend it on these things.

The 16 Cars Most Likely to Last 200,000 Miles
The 16 Cars Most Likely to Last 200,000 Miles

One automaker takes half the spots on a list of the longest-lasting vehicles.

7 Social Security Rules Everyone Should Know by Now
7 Social Security Rules Everyone Should Know by Now

Confusion over Social Security is a shame, considering how many of us will need this money badly.

9 Shopping Mistakes to Avoid at Costco
9 Shopping Mistakes to Avoid at Costco

Are you missing out on serious savings at your favorite warehouse club?

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

They don’t make coffee makers like this anymore.

7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

14 Things You Should Stop Buying in 2021
14 Things You Should Stop Buying in 2021

These convenient household products come with hidden costs that you might not have considered.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

Is Writing a Check Still Safe?
Is Writing a Check Still Safe?

Every time you pay by check, you hand your bank account numbers to a stranger.

6 Ways to Protect Your Retirement Accounts From Hackers
6 Ways to Protect Your Retirement Accounts From Hackers

Imagine having $245,000 stolen from your retirement account — and not being reimbursed.

8 Things You Should Replace to Improve Your Life Today
8 Things You Should Replace to Improve Your Life Today

Being frugal isn’t smart if you put off replacing these items.

This Is the Most Dependable Car Brand in the U.S.
This Is the Most Dependable Car Brand in the U.S.

This brand’s vehicles are least likely to give drivers repair headaches, according to J.D. Power.

7 Hidden Sections of Amazon Every Shopper Should Know
7 Hidden Sections of Amazon Every Shopper Should Know

These little-known departments of Amazon are gold mines for deal-seekers and impulse shoppers alike.

9 Millionaires and Billionaires With Surprisingly Frugal Habits
9 Millionaires and Billionaires With Surprisingly Frugal Habits

Some of the world’s richest women and men drive modest cars, clip coupons and love a bargain.

7 Income Tax Breaks That Retirees Often Overlook
7 Income Tax Breaks That Retirees Often Overlook

Did you realize all these tax credits and deductions exist — or that they apply to retirees?

7 Social Security Benefits You May Be Overlooking
7 Social Security Benefits You May Be Overlooking

There’s more to Social Security than retirement benefits.

13 Amazon Purchases We Are Loving Right Now
13 Amazon Purchases We Are Loving Right Now

These practical products make everyday life a little easier.

The 6 Best Investing Apps for Beginners
The 6 Best Investing Apps for Beginners

If you’re looking to ease into investing in the coronavirus economy with just a little money, check out these easy-to-use tools.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.