Client Service October 3, 2018

Long-Term Care Planning Neglected by Many Older Americans

When individuals plan ahead for long-term care, they can better secure their own future while reducing financial burdens on their friends and family.

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A recent survey conducted online by The Harris Poll on behalf of OneAmerica asked more than 2,000 adults whether they have had any conversations about long-term care—with a family member, spouse or partner, friend, health care professional, financial planner, insurance agent, attorney, clergy member, accountant or anyone else about preparing for their possible need of long-term care.

Despite the survey asking about such wide networks, still nearly four in 10 Americans age 65 and over say they haven’t had conversations with anyone about preparing for their possible need of long-term care. According to Harris Poll and OneAmerica, this low proportion was similar to American adults overall, 38% of whom said they hadn’t had such conversations.

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On the flip side, survey results show 62% of Americans say they have had these conversations, with adults age 65 and older more likely than younger adults (18 to 64) to have talked to their spouse/partner (38% vs. 27%) and/or a financial planner (17% vs. 7%).

OneAmerica researchers call these findings troubling, given the fact that as many as 70% of Americans can expect to have a long-term care need at some point in their lifetimes, according to the U.S. Department of Health and Human Services.

“For about 20% of Americans, long-term will be needed for longer than five years, due to conditions such as Alzheimer’s disease and other dementias, Parkinson’s disease, and other chronic conditions,” they explain. “Planning ahead for the possibility of long-term can ensure assets are best positioned for any need that arises, and can reduce the burden on family members and loved ones when the time comes.”

Unsurprisingly, the wealthier segments of the population are more likely to say they have engaged in any long-term care planning conversations, with 70% of those making $100,000 or more reporting so. This compares with only 56% of those whose annual household income is less than $75,000.

Even though they are more likely to speak about the topic with friends or family, still only 15% of those with annual household incomes of $100,000 or more say they’ve had such conversations with a professional financial planner, and just 10% report speaking with an insurance agent.

“For individuals and financial professionals, it’s important to start those conversations,” says Tracey Edgar, vice president of sales for care solutions at OneAmerica. “Regardless of income, it’s important to have conversations about the possibility of long-term care. Asset-based protection is a solution that may be more within reach than people realize, especially if they’re nearing retirement and have assets to position. And everyone can benefit from understanding each other’s wishes and expectations for care.”

Data & Research October 2, 2018

Setting Realistic Expectations about Work in Retirement

Twenty-one percent of workers expect that working in retirement will provide them with a major source of income, but this is only true for 9% of retirees.

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Sixty-four percent of workers are very or somewhat confident they will have enough money to last throughout their retirement, according to the Employee Benefit Research Institute’s (EBRI’s) Retirement Confidence Survey, said Craig Copeland, senior research associate at the Institute, speaking during a webinar on the topic of working during retirement. However, only 17% are very confident.

Among retirees, 75% are very or somewhat confident their money will last throughout their retirement, and 32% are very confident, he said.

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The median age at which people expect to retire is 65, but the actual age is 62, he said. The reasons why are usually because of a health problem, a disability or being laid off.

Seventy-nine percent of workers want or expect to work in retirement, said Lisa Greenwald, executive vice president with Greenwald & Associates, but only 33% of retirees have worked for pay since retiring. Twenty-one percent of workers expect that working in retirement will provide them with a major source of income, but this is only true for 9% of retirees, Greenwald said.

When workers were asked why they would like to work in retirement, 94% said they want to stay active and involved. Eighty-two percent said they enjoy working, 90% want money to buy extra things in retirement, and 74% expect the income will be necessary to make ends meet.

The same questions were asked of retirees. Ninety percent said they want to stay active and involved. Eighty-two percent enjoy working. Sixty-seven percent want to have money to buy extra things in retirement, and 42% said they are working in retirement to make ends meet, Greenwald said.

Among the retirees who are working, 35% said it was planned and 65% said it was unplanned.

The U.S. Chamber of Commerce has tried to promote the idea of a phased retirement, said Aliya Wong, executive director of retirement policy. The problem, she said, is that “not every job is suitable for phased retirement. Employers want to maintain discretion but worry that could lead to discrimination.”

Also, if a worker goes through phased retirement and continues to contribute to their workforce retirement plan, there is the question of how does a phased retiree figure into the nondiscrimination testing, Wong added.

The Department of Labor (DOL) has created a Senior Community Employment Program to provide training for low-income seniors who want to continue to work, Wong continued. However, she said, “the program is not expansive or very well funded or publicized.” Because of the growing need among employers to find qualified workers, the Chamber is hopeful they will partner with the DOL on this program, Wong said.

The American Disabilities Act and the Occupational Safety and Health Administration could potentially make it easier for older workers to remain on the job longer, she said. For instance, an employer could implement technological aids such as a magnification screen on computers, or build ramps to enable people in wheelchairs to enter a building, she said.

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