Critter Corner: New Study Shows 80% of Seniors Can’t Afford Two Years of Long-Term Care 

Dear Angel, 

I just read that today’s 65-year-old can expect to live at least another 20 years, according to the Social Security Administration! That kind of longevity is definitely a blessing, but given what everything costs today, I’m not sure that I can afford it. What is the outlook for public policy and federal programs to help pay for long-term care in the future? If nothing is on the horizon, what do you suggest I do? Thanks so much for your help! 

Lotta Munney 


Dear Lotta, 

Seventy percent of all Americans 65 and older will require long-term care services and support, either at-home, in an assisted living facility, or in a nursing facility. Yet many won’t have a way to afford it. 

A new report by the National Council on Aging shows that eight in 10 Americans are unprepared to cover the costs of long-term care.  

  • Most older Americans continue to lack the resources that would allow them to weather a “financial shock” such as a significant long-term care need, health issue, or loss of income due to divorce or widowhood.  
  • The analysis of 2018 data previously found that 80% — or 47 million households with older adults — are financially struggling today or are at risk of falling into economic insecurity as they age.  
  • The updated analysis found that despite older adults’ preference to age in place, 60% would be unable to afford two years of in-home long-term services and supports. 45% of people 60 and older had household incomes below the Elder Index value for their geography. In other words, their average income was below what they needed to afford basic living needs. 
  • A significant blow to a household’s income or assets — what’s defined by experts as a “financial shock,” such as the need for a long-term care — can easily destroy the financial security of older adults. Over two decades, a quarter of U.S. adults 50 and older will experience such a financial shock that will undercut at least 75 percent of their net wealth, according to the report. 

Marc Cohen is a professor at the University of Massachusetts who studies the financial well-being of older adults and is a co-author of the report. According to Cohen, “(t)he vast majority of Americans, if they had a need for long-term services and supports, would not be able to afford more than two years in the nursing home, if they had a significant health issue, or they lost income due to divorce or widowhood.”  

Experts agree that solutions for affordable elder care fall into two camps: increasing the income and assets of older Americans or reducing the cost of long-term care. Personally, Cohen believes that subsidizing the cost of care is a more realistic approach. Unfortunately, there is nothing on the horizon right now when it comes to the government subsidizing long-term care. Beyond public policy and federal programs, Cohen said the best strategy for a household starts with planning in advance.  

According to Cohen, “It’s almost as if people are hoping that none of these things happen to them, that they won’t have a major health event, they won’t have a long-term care need. They’re going to live with their spouse well into their 80s or 90s — but hope is not a strategy.” 

For information on planning ahead for long-term care, please read today’s Ask the Expert article to learn more about hybrid long-term care policies that are a combination of either a life insurance policy or an annuity along with long-term care insurance, and the four levels of planning we offer at the Farr Law Firm. If you have not done the appropriate level of planning, or had your planning documents reviewed in the past several years, please call the Farr Law Firm today! 

Hope this helps! 


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About Evan H Farr, CELA, CAP

Evan H. Farr is a 4-time Best-Selling author in the field of Elder Law and Estate Planning. In addition to being one of approximately 500 Certified Elder Law Attorneys in the Country, Evan is one of approximately 100 members of the Council of Advanced Practitioners of the National Academy of Elder Law Attorneys and is a Charter Member of the Academy of Special Needs Planners.

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