BMO Wealth Institute Report

Retiring Into Uncertainty

One-in-Three Americans afraid of losing their independence in retirement

CHICAGO, October 5, 2015 – The BMO Wealth Institute today released a report which looks at whether Americans are adequately prepared for future long-term care needs as they age.

According to the report – Who will be your caregiver? – Americans’ greatest health-care-related aging concerns include:

  • Losing the ability to live independently (36 percent)
  • Not having enough money to pay for adequate health care (20 percent)
  • Not being able to afford to remain in their own homes throughout their lifetimes (13 percent)

“Requiring more health care is a common part of aging and has a variety of consequences that stem from having to change your day-to-day routine. It can be a huge adjustment to lose independence because of your health care needs,” said Stephen Williams, Vice President, U.S. Financial Planning Strategy, BMO Private Bank. “The costs associated with a high level of care can increase the stress involved with this process.”

Planning Funding Options

Fifty-nine percent of Americans plan to use their own savings to fund any future long-term care needs. They also plan to use the following funding options:

  • Medicaid (57 percent)
  • Long-term care insurance (22 percent)
  • Insurance with long-term care riders (15 percent)

“To gain peace of mind about your finances as you age, it’s a good idea to consult a professional who can work with you to develop a financial plan incorporating the costs of future long-term care needs. There are many benefits to having a plan like this – it can help protect your family finances, allow you to fund a higher level of care and provide liquidity,” Mr. Williams added.

Essential Conversations About Long-Term Care

The report also examined where Americans would most like to receive long-term care, finding that the majority (59 percent) would prefer to receive this type of care in their own home rather than in an assisted-living facility (23 percent). Seven percent would like to receive long-term care in a family member’s home.

The costs associated with a high level of care can increase the stress involved with this process

The report noted that receiving long-term care in one’s own home is potentially more affordable than receiving care in a facility, but can put pressure on loved ones who may need to take on some of the caregiving responsibilities. Although family and friends may play a large part in their loved ones’ long-term care, the report revealed that:

  • More than one third (36 percent) of Americans have not discussed any issues related to future long-term care needs with their partner, adult child or other relative
  • Fewer than half (48 percent) have talked about their decisions around naming a power of attorney for health or living will with their loved ones
  • Only 22 percent have discussed how they intend to pay for long-term care or the preferred ways they wish to receive long-term care

“Talking about aging and future health care needs is not an easy conversation to have. However, family members and friends often become caregivers to their loved ones or help finance care so they should be involved in any plans or decisions you make around how you might deal with health problems as you age. Having these discussions may also give you more control over how you receive long-term care in the future,” said Mr. Williams.

The report reminds Americans of the following tax-saving opportunities that can offset long-term care expenses:

  • Nursing home care costs
    A tax credit is available to those who pay nursing home care costs, including both lodging and meals
  • Attendant care costs
    Those who pay the costs to hire a person to provide care, either within their own home or in an outside care facility, may be able to claim a tax credit
  • Treatments and rehabilitative services
    Those who are prescribed certain treatments and rehabilitative services by a licensed health care practitioner as part of a plan of care may be eligible for a tax credit
  • Insurance premiums
    A tax credit is available to those who pay for certain long-term care services up to specified limits using a qualifying long-term care insurance policy

To view a copy of the full report, please visit here.




About the BMO Wealth Institute
The BMO Wealth Institute provides insights and strategies around wealth planning and financial decisions. The Institute’s team of professionals have deep expertise around all aspects of wealth planning including retirement, estate, tax and insurance.
About BMO Private Bank, a Part of BMO Financial Group
BMO Private Bank offers a comprehensive range of wealth management services that include investment advisory, trust, banking and financial planning to meet the financial needs of high-net worth clients. Through integrated teams of experienced financial professionals, BMO Private Bank helps its clients realize their financial and lifestyle goals with solutions that are custom tailored and delivered with the highest level of personalized service.
BMO Private Bank is a brand name used in the United States by BMO Harris Bank N.A. Member FDIC. Not all products and services are available in every state and/or location.