Long-term care continues to be a rising concern, and 61 percent of older Americans say they would rather die then live in a nursing home, says a new survey from The Nationwide Retirement Institute.
Caregivers are often significantly impacted as their loved ones transition into retirement and beyond. Seventy percent of caregivers reported significant emotional stress from a variety of contributing factors including the stress of balancing tasks (54 percent), negative effects on their health (29 percent), less time to spend with family (24 percent), and marital strain (23 percent).
“The role of a caregiver can be difficult, and they often give up more than expected when it comes to caring for a family member,” said Eric Henderson, senior vice president of Nationwide’s annuity and life insurance businesses. “Our sixth annual survey reveals the emotional, physical and financial toll on caregivers and how older Americans feel about long-term care.”
In addition to emotional stress, older Americans and are also feeling the pressure financially. While 76 percent of older adults would like to rely on a family member for long-term care, 56 percent worry they will become a burden to their family as they get older. Despite the desire to be cared for by loved ones, a striking 72 percent say they would only rely on a family member if they could pay them, according to the survey.
Compensation is also a complex issue, considering most adults ages 50 and older would estimate the cost of their care at roughly $36,400 annually. In actuality, long-term care costs can average from $43,536 to $92,376 each year. Many caregivers go without compensation when caring for their family members. Only 24 percent of caregivers reported receiving any form financial support and 61 percent reported spending an average of $3,827 of their own money on care costs each year.
“As important as being a caregiver is, our survey finds the job also presents some challenges that impact their lives,” Henderson added. “Caregivers noted the emotional, physical, social and financial burden demanded by their role. To minimize the negative effects of caregiving, it’s important to have discussions about the future to effectively plan for long-term care.”
While the cost of long-term care can be daunting, a disconnect with financial reality has left consumers underprepared. Only 14 percent of adults (age 50 and older) currently have long-term care insurance, and only 27 percent said they are confident in their plan to pay care expenses. Not only are older Americans not confident in their plans for the future, 55 percent have not discussed long term care costs with anyone (spouse, child, or financial advisor).
Lack of knowledge is likely a major reason many older Americans have not been more proactive. More then half of respondents reported believing long-term care policies are for use in nursing homes. The reality is that only 28 percent of policies are actually used for this form of care, with 52 percent of policies being used for home health from paid professionals.
When it comes to preparation for long-term care, 60 percent of older adults who have a financial advisor say they have not discussed long-term care costs in retirement, and 37 percent do not believe discussing the topic is important. Of those who have spoken with their advisor about long-term care, 68 percent believe it is an important discussion to have.
“The good news is those who have discussed long-term care costs with a financial advisor say these long-term care discussions are important,” Henderson said. “Financial advisors can play a major role in helping people plan for and live in retirement by providing a fact-based estimate of long-term care costs and a plan to address those costs.”