New survey reveals the importance of long-term care planning and insurance, though many avoid it
COLUMBUS, Ohio – Affluent older Americans have many concerns about long-term care in retirement and not talking about it may be making matters worse. A new Nationwide Retirement Institute® survey reveals that 56 percent of affluent older Americans would rather die than live in a nursing home, yet 47 percent fear becoming a burden, with women more likely than men to be worried (52 percent vs. 42 percent).
A majority (71 percent) of the 1,007 U.S. adults age 50 or older with a household income of $150K surveyed online by Harris Poll on Nationwide’s behalf say that they would like to have the option of relying on a family member if they needed long-term care; however, they would not expect help from (70 percent) or rely on (65 percent) a family member unless they were able to pay them.
“Affluent adults fear nursing homes but are concerned their care needs will challenge their family if they require caregivers,” said Holly Snyder, vice president of Nationwide’s life insurance business. “However, these adults are not discussing their long-term care needs, and not planning ultimately results in fewer options when one does need care.”
Of greater concern, many older affluent adults are not taking advantage of long-term care insurance and planning. Only 27 percent currently have long-term care insurance for themselves or someone else.
Only 42 percent are confident in their plan to pay for long-term care expenses. Despite their concerns, about two in five (39 percent) have not discussed long-term care costs with anyone including a spouse, partner, children or financial advisor.
The hardships of being a caregiver
Our seventh annual survey also included a separate sample of 522 U.S. adults age 50 or older who are or have been caregivers, meaning they have or are now providing paid or unpaid long-term care to a friend or family member, not through an agency, business or non-governmental organization. The survey results reveal the challenges of being a caregiver. On average, caregivers spend 56 hours per week fulfilling their role.
In addition, caregivers often experience financial pain points. Only one in five caregivers (20 percent) have received any financial support for their efforts and more than half (56 percent) spend their own money on caregiving expenses. Of those that do, they on average are spending $4,038 a year of their own money on caregiving expenses.
“The role of a caregiver can be difficult, as they often give up more than expected when it comes to caring for a family member,” Snyder said. “Even though the care often comes from love, many affluent older adults want to be able to compensate family members for caregiving.”
Beyond time and financial commitments, half of caregivers (52 percent) say they face added stress in balancing things. In addition, 64 percent say caregiving has negatively impacted their life emotionally and two fifths of caregivers (41 percent) say that their physical health has been negatively impacted.
However, the large majority of caregivers (72 percent) are grateful to have been able to provide care to their loved one and three-quarters (74 percent) say that being a caregiver has brought meaning and purpose into their life.
“This year’s survey underscores the challenges caregivers face as a result of their role, including negative impacts to a caregiver’s physical, emotional, social and financial well-being,” Snyder added. “Having open conversations with your loved ones better equips everyone involved and allows you to develop an effective long-term care plan that mitigates negative impacts for caregivers.”
Have the long-term care discussion
One reason some people may be avoiding the conversation is that a quarter of affluent older adults (25 percent) doubt they will live long enough to use long-term care insurance, and men are 50 percent more likely than women to feel this way. In addition, 48 percent of older Americans think a long-term care policy is most often used in a nursing home. Actually, most policies (52 percent) are used for home health care provided by paid professionals.1 Only 28 percent of long-term care policies are used for nursing home care.1
Nearly three in four affluent adults (73 percent) fear out of control health care costs, and 50 percent are very or somewhat concerned about having enough money to last through their retirement. However, those with an advisor are more likely to say they are confident in their ability to pay for long-term care expenses compared to those who do not have an advisor (50 percent versus 35 percent).
Nearly two in five (39 percent) of affluent older adults plan on discussing long-term care costs with a financial advisor. These conversations prove valuable with 64 percent of affluent adults who have discussed long-term care costs with a financial advisor saying these discussions are important.
“Developing a plan for long-term care costs based on a person’s personal situation and goals can be impactful,” Snyder said. “Financial advisors can help people plan for and live in retirement by providing a fact-based estimate of long-term care costs and a unique plan to address those costs.”
To simplify this complicated issue and encourage discussions around health care and long-term costs in retirement, Nationwide’s Health Care/LTC Cost Assessment tool uses proprietary health risk analysis and updated actuarial cost data such as personal health and lifestyle information, health care costs, and medical coverage. It provides a meaningful, personalized cost estimate that will help advisors and clients plan for future medical and long-term care expenses.
To learn more about the 2018 Nationwide Long-term Care Consumer Survey, visit www.nationwide.com/ltcinsights and advisors can visit www.nationwidefinancial.com/ltcinsights
This survey was conducted online by The Harris Poll on behalf of The Nationwide Retirement Institute between February 5 and 22, 2018 among 1,007 U.S. adults age 50 or older with a household income of $150K or more and 522 U.S. adults age 50 or older who are or have been caregivers. Caregivers are defined as those who have ever or are now providing paid or unpaid long-term care to a friend or family member, not through an agency, business, or non-governmental organization. Data are weighted where necessary by age by gender, race/ethnicity, region, education, income, marital status, and propensity to be online to bring them in line with their actual proportions in the population. Because the sample is based on those who were invited to participate in the panel (and not random), we cannot calculate estimates of theoretical sampling error.
1 “Share of LTCI Claims Starting with Nursing Care Falls: AALTCI”, ThinkAdvisor, Allison Bell – April 20, 2018
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