Retirees Are Not Confident They'll Be Able to Afford Long-Term Care: Poll
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It's no shocker that people want to retire comfortably, but what is surprising is just how few Americans believe they can actually achieve a comfortable post-work life.
According to poll results released Thursday, only 23% of retirees today say they definitely think they will be able to maintain a nice lifestyle throughout their retired years. One area where there's particular uncertainty is their long-term care — an expense just a small group of retirees think they'll be able to cover.
What the data says
The data, published by the Transamerica Center for Retirement Studies, shows that 14% of retirees say they are "very confident" that they'll be able to afford long-term care if they need it.
Long-term care refers to a wide-ranging and highly personalized set of assisted services a person needs. Because old age is when many people's health problems begin to accumulate, many retirees end up paying for assisted living, skilled nursing and/or a room in a nursing home with their savings.
It's estimated that 70% of retirement-age Americans will need ongoing care at some point, according to the Department of Health and Human Services, and many retirees and pre-retirement workers (35% and 41%, respectively) fear a decline in their health that will require long-term care. About 28% of retirees and 35% of pre-retirement workers say they're specifically worried about the costs for long-term care.
These concerns compound other financial anxieties shared by retirees and older workers alike. The survey shows that nearly half of older workers and one-third of retirees fear outliving their savings entirely, and about 4 in 10 across both groups worry that Social Security will not be able to bridge that gap.
How retirees plan for long-term care
The cost for care can be high: For instance, the average private room at a nursing home costs about $9,000 per month, according to one estimate.
Long-term care insurance exists to help pay for these expenses, and there are tons of long-term care insurance companies to choose from. But the premiums tend to be high and often increase over time, putting it out of reach for many aging workers. On top of that, lots of Americans don't fully grip the scope of long-term care insurance, and many might not even consider it as an option as a result.
In fact, a large group of people are hoping to rely on loved ones for help if their health declines. The Transamerica report shows that 46% of those surveyed plan to receive their care from family and friends rather than long-term care specialists. Of the remaining pool of retirees, 31% say they have no plan at all for long-term care.
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