The statistics on longevity show that people are living longer and will likely need long-term care (LTC) at some point in their lives. The unknowns each of us faces are how many years we will need LTC and what it will cost. With the cost of LTC increasing year over year, not considering how it will affect your retirement savings can be devastating to you later. By the numbers, here are some surprising statistics about LTC:
- 70%: Percentage of people turning age 65 who will need some type of long-term-care services in their lifetimes.
- 48%: Percentage of people turning age 65 who will need some type of paid long-term-care services in their lifetimes.
- 24%: Percentage of people turning 65 who will require paid long-term care for more than two years.
- 15%: Percentage of people turning age 65 who will spend more than two years in a nursing home.
- 3.7 years: Average duration of long-term-care need, women.
- 2.2 years: Average duration of long-term-care need, men.
- 67.9%: Percentage of people in long-stay nursing facilities who are women.
Source: Morningstar 100 Must-Know Statistics About Long-Term Care: Pandemic Edition
Your financial professional has software to help prepare a financial plan with the assumed costs of LTC and how it will impact your retirement nest egg. It is up to you to decide if you should consider purchasing LTC insurance or not. However, remember that the cost of LTC will likely increase over the following years:
- $105,850: Median annual nursing-home cost, private room, 2020.
- 13%: Estimated percentage of individuals age 65 today who will incur out-of-pocket long-term-care costs of between $0.01 and $50,000 during their lifetimes.
- 11%: Estimated percentage of individuals age 65 today who will incur out-of-pocket long-term-care costs of between $50,000 and $150,000 during their lifetimes.
- 4%: Estimated percentage of individuals age 65 today who will incur out-of-pocket long-term-care costs of between $150,000 and $250,000 during their lifetimes.
- 9%: Estimated percentage of individuals age 65 today who will incur out-of-pocket long-term-care costs of more than $250,000 during their lifetimes.
Source: Morningstar 100 Must-Know Statistics About Long-Term Care: Pandemic Edition
There are hybrid LTC insurance policies that cover more than just nursing home care. Once you have the information from your financial plan, it’s time to research LTC insurance policies and the companies that provide the insurance for this specialized type of care.
Your financial professional can help you work towards your retirement and the possible need for long-term care. Reach out to them to find out more about long-term care insurance options available today.
Important Disclosures:
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
This material contains only general descriptions and is not a solicitation to sell any long term care (LTC) insurance product. For information about specific LTC coverage, needs or situations, contact your insurance agent. This article is intended to assist in educating you about LTC insurance generally and not to provide personal service
All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.
This article was prepared by FreshFinance.
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