Long Term Care and Longevity: Will We Get Overwhelmed?

Most people know about the potential impact of costs tied to long-term care, but they haven’t taken time to protect themselves.

Long-term care costs could become overwhelming as a result of longevity. The number of individuals turning age 65 and older is set to double by 2060, by the time that today’s Millennials start to turn 65. They will also make up 24% of the population as compared with 15% today. That means that 1 in 4 individuals will be in an older age category at high risk of needing long-term care.  long term care costs

This is the result of data collected by a study referred to as Aging in the United States. The number of older individuals in the U.S. right now places a major burden on breadwinners in their productive years, but by 2030, there will only be approximately 2.8 adults of working age for every individual age 65 and older. This is a decrease from 5 in 2000.

Today’s working age citizens will be hit by a double whammy trying to build their own economic future and the economy. Data from aging parents shows that approximately 3 out of every 4 aging Americans will need some type of long-term care after age 65. The odds of a financial impact for any working couple with two sets of parents is extremely high if any of those parents does not have the resources for their own care. Long-term care services can be extremely expensive, costing between $100,000 or $200,000 per year, depending on the type of claim services and the location.

When multiple family members involved need long-term care, the cost can become extremely prohibitive, but these financial impacts extend beyond the cost of care. It can also lead to interrupted employment if one partner has to take time off work in order to care for an aging parent.

Retirement Being Redefined By Lack of Confidence for Baby Boomers

Baby Boomers make up a significant portion of the population today, and as many of them are confronting retirement and realizing they do not have appropriate support behind them, this is redefining what it means to retire. There are approximately 76 million Baby Boomers coping with the impacts of the financial crisis as they prepare for or enter retirement. retirement and lack of confidence

The financial crisis decreased the value of their homes, and it cut into their net worth and savings. This means that the confidence carried out by Baby Boomers in achieving a satisfying retirement decreased significantly. Those are the results of a study commissioned by Bankers Life Center for a Secure Retirement. Less than 4 out of every 10 Baby Boomers are certain that they will be able to have a personally satisfying retirement. The study looks at how lack of confidence has changed the attitudes and behaviors regarding saving and investing, and how many of them are adapting to meet the new challenges.

Approximately 28% of Boomers are making more conservative investments, and 26% report that they no longer invest due to having weathered the most recent crisis. The Boomers who were surveyed also have decreased their expectations for complete financial independence in retirement. This study indicates that

-Only 19% expect to pay off their mortgage.

-34% expect to retire free of debt.

-16% believe they will have an inheritance to pass on to heirs.

-16% expect to have savings.

The percentage of Baby Boomers who expect to work part-time or full-time in retirement has increased from one-third to almost one-half since before the crisis. The new retirement often means working longer and reconsidering the amount of money they will need to support themselves in retirement.

If you have questions about how retirement planning and estate planning can work together, schedule a consultation with an experienced estate planning lawyer. A lawyer can walk you through how these issues often intersect, and the appropriate strategies and tactics you can use to protect yourself now and well into the future. With a lot on the line for your retirement, as well as your ability to pass on assets to your loved ones, taking action sooner rather than later is strongly recommended.

 

 

 

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