Baby Boomers Face Spike in Homelessness — How to Prepare so It Never Happens to You!

Q. I read in The Washington Post that a quarter of a million baby boomers in the US are estimated by the government to be homeless. That seems like a lot of seniors who don’t have a place to live and likely can’t afford food to eat. I can see how this can happen to someone as times can get tough for any of us. What do you recommend to ensure that seniors have a place to grow old with dignity, have the basic necessities, and have the care that they need as they get older? Thanks for your help!

A. Born between 1946 and 1964, baby boomers now number over 70 million, according to the latest US census. With the oldest boomers in their mid-70s, all will hit age 65 by 2030. Sadly, these baby boomers make up around one-third of persons who are currently experiencing homelessness.

How can that be? One of the most common reasons is simply because their income and/or savings are inadequate to pay for housing and long-term care, and there are not enough affordable living options available for them. Other reasons can include job loss, divorce, family death, or a personal health crisis. 

In one case study, a couple talked about how they have volunteered in a local homeless shelter for about five or six years. One of the things that surprised them the most is how many of the homeless are seniors and/or persons with disabilities. They have seen people who use walkers struggle up to the food line to get their dinner. They witnessed kindness and humanity as they watched able-bodied homeless people reach out to help their elderly companions, by filling or carrying their plates for them or helping them into their wheelchairs.  

“We’re seeing a huge boom in senior homelessness,” said Kendra Hendry, a caseworker at Arizona’s largest shelter, where older people make up about 30 percent of those staying there. “These are not necessarily people who have mental illness or substance abuse problems. They are people being pushed into the streets by rising rents.” 

Homelessness can affect just about anyone, and it is especially sad when it’s an older person who simply can’t afford housing or proper care. In another case study, Cardelia Corley ended up on the streets of Los Angeles County after the hours at her job were cut. Now 65, Corley said she was surprised to meet so many others who were also once gainfully employed, including a teacher and a nurse who lost her home following an illness. “I’d always worked, been successful, put my kid through college,” she said. “And then all of a sudden things went downhill.”   

Researchers Project That Senior Homelessness Will Triple Over the Next Decade 

Researchers are projecting that senior homelessness will become a bigger problem than it already is and that the aging homeless have medical ages greater than their years. Mobility, cognitive issues, and chronic medical problems such as diabetes are some of the issues that they will continue to face. “Homelessness is bad for your health,” said Thomas Byrne, a social welfare policy professor at Boston University School of Social Work, explaining that someone experiencing homelessness at 55 could have the health needs of a housed 80-year-old. 

A 2019 study of aging homeless people led by my alma mater, the University of Pennsylvania (Penn), drew on 30 years of census data to project the US population of people 65 and older experiencing homelessness will nearly triple from 40,000 to 106,000 by 2030, resulting in a public health crisis as their age-related medical problems multiply. Baby boomers have made up the largest bulk of the US homeless population for three decades, according to the study, and faced competitive job markets, back-to-back economic recessions, and skyrocketing housing costs during the 1970s and ’80s. As a result, they’ve remained more susceptible to homelessness ever since. 

According to Dr. Margot Kushel, a physician who directs the Center for Vulnerable Populations at the University of California, San Francisco, “We are seeing that retirement is no longer the golden dream,” said Kushel. “A lot of the working poor are destined to retire onto the streets. That’s especially true of younger baby boomers, now in their late 50s to late 60s, who don’t have pensions or 401(k) accounts. About half of both women and men ages 55 to 66 have no retirement savings, according to the census.” 

Byrne, a contributing author on the Penn study, said it’s an issue that must be addressed immediately to prevent premature aging and death. He expressed how we need more options for these people. “No one would want to see their own parents or grandparents experiencing homelessness,” he said.  

Plan Ahead to Ensure that You Can Afford Housing and Long-Term Care as You Get Older 

As many as 70 percent of Americans will require long-term care at some point in their lives, so it is wise to think about it and plan for it, to be prepared in advance should the unexpected happen. Currently, costs for long-term care facilities in the DC Metro area can run anywhere between around $6,000-$11,000 per month for assisted living and around $12,000 to $15,000 per month for nursing home care. If you multiply that figure by the average stay of approximately three years, it comes to quite a significant sum! Most of us would be broke if we had to pay that amount! It is also important to understand that Medicare does not pay for long-term care. Medicaid is the only federal program that will help pay for long-term care, but you need to be financially eligible to get Medicaid long-term care, which in most cases means having less than about $2,000 in countable assets. This does not mean that you have to spend down your assets paying for long-term care until you go broke. On the contrary, we help people every day protect their assets so they are not countable in connection with Medicaid. But Medicaid only pays for nursing home level care; Medicaid does not pay for assisted living level care.  

Because of this, everyone should consider purchasing some type of long-term care insurance, whether a stand-alone traditional long-term care insurance policy with monthly premiums or a hybrid policy that combines a life insurance policy or an annuity with long-term care benefits, and is often paid for in one lump sum. Which is better is different for every person and depends on a variety of facts and circumstances, but here is some general guidance. 

Traditional Long-Term Care (LTC) Insurance to Pay for Long-Term Care 

Other than the fact that they typically have the lowest monthly premiums, at least at the start, there are not many advantages these days when it comes to traditional, stand-alone term-care insurance policies, and most analysts suggest you should avoid these stand-alone policies altogether. 

Hybrid policies are a combination of either a life insurance policy or an annuity along with long-term care insurance, and hybrid policies are vastly more popular than the older, traditional long-term care insurance “use it or lose it” policies.  In fact, in 2021, approximately 500,000 people purchased combination or hybrid policies.  

Why Are Hybrid Policies Usually Better?   

With hybrid policies, if you don’t ever need long-term care, then you don’t lose the coverage; instead, you can take withdrawals from the annuity to help you continue to pay your monthly expenses or, if that’s not needed, you will have a life insurance death benefit to go to your desired beneficiaries. Although the premium you pay for a hybrid policy will always be more expensive initially than the initial premium for a traditional long-term care insurance policy with a similar benefit, the traditional long-term care insurance premium can go up at any time, and often does. Therefore, if you can afford the additional premium upfront for a hybrid policy, you know that the premium will remain fixed and you will reap any advantages of a hybrid long-term care insurance policy. Please click here to read my article that explains all of the benefits!  

Planning Ahead for Long-Term Care  

Besides being one of approximately 500 Certified Elder Law Attorneys in the country, I am also an experienced retirement planning advisor and long-term care insurance advisor. Through my insurance company, Lifecare Financial Services, I have been helping clients since 2006 purchase and use hybrid LTC insurance policies to assist in paying for long-term care, especially home care and assisted living, before the need for the nursing home level of care arises. Learn more here.  

It is always wise to plan ahead for the very likely possibility that you will need long-term care. Life Care Planning and Medicaid Asset Protection is the process of protecting assets from having to be “spent down” in connection with getting nursing home level care (either at home or in a nursing home), while also helping ensure that you get the best possible care if you do end up needing nursing this level of care.  

If you have not done Incapacity Planning, Long-Term Care Planning, or Estate Planning (or had your Planning documents reviewed in the past three to five years), now is a good time to plan and get prepared! Among other services, we offer peace of mind through our four levels of lifetime protection planning:      

Level 1 — Incapacity Planning is about protecting your assets from lifetime probate.      

Level 2 — Revocable Living Trust Estate Planning is about protecting your assets from lifetime probate and after-death probate.      

Level 3 — Living Trust Plus® Asset Protection Planning provides protection from probate, lawsuits, home care, and assisted living expenses by allowing access to Veterans Aid and Attendance benefits, and nursing home expenses by allowing access to Medicaid.  

Level 4 – Life Care Planning, Medicaid Asset Protection, and Veterans Asset Protection provides comprehensive planning and filing services, often at times of crisis, though this type of planning can be done anytime someone is beyond the first step of the Elder Care Continuum aka Aging Continuum.       

Please contact us whenever you are ready to ensure that you have the appropriate level of planning: 

Northern Virginia Elder Law Attorney: 703-691-1888             
Fredericksburg, VA Elder Law Attorney: 540-479-1435             
Rockville, MD Elder Law Attorney: 301-519-8041             
Annapolis, MD Elder Law Attorney: 410-216-0703   

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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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