Moll Law Group recently surveyed 2,000 people to ask how prepared they feel about meeting the costs of health care—and in particular long-term care arrangements—during retirement.
As the firm points out in a summary of the survey results, it is pretty much universally daunting for workers to think about how to best plan for future health care expenses. The effort requires factoring in many unknowns, such as unanticipated health setbacks or financial obstacles, as well as many knowns that only serve to ramp up concern, such as the ever-increasing cost of medical services.
Citing data from the U.S. Department of Health and Human Services, the analysis suggests nearly 70% of Americans will need some type of long-term care. But, according to Moll Law Group, “most of the Americans surveyed are wildly unprepared for the out-of-pocket costs of long-term care.”
In the survey, the average expected long-term health care cost is given as just $25,350, whereas actual average costs are closer to $50,000. When factoring in the average costs of related services such as assisted living ($45,000), semi-private nursing home care ($85,775) or private nursing home care ($97,455), the picture is made even more concerning. Also informative, the average age Americans think they will need long-term care such as a nursing home or assisted living is 79, whereas the actual average age when Americans start taking advantage of these types of services is 73.
According to the Moll Law Group survey, 64% of Americans have nothing saved for long-term care. At the same time, 67% say they are not able to contribute to parents’ long-term care due to their own financial constraints. This is despite the fact that the average length of time spent in long-term care for men is 2.2 years, and 3.7 years for women.
“Since most people do not have endless sources of money, especially after retiring from the work force, saving for long-term care must be factored in early to get the most return,” the analysis concludes. “While private nursing home care is probably most desired option, it is also the most expensive, costing on average $97,455. Semi-private facilities are slightly less at $85,775, while assisted living facilities are closer to $45,000. Having sound financial plans—and sticking to them—is the key to peace of mind later in life.”
As pointed out in the analysis, the truth is that “discussing long-term care is a hard and uncomfortable conversation, one that most people do not have.”
“In fact, only 33% of those surveyed have discussed options with their loved ones, and for 48%, the decision to move a loved one into long-term care was unexpected,” the firm reports. “By putting the forethought into what kind of future and quality of life you and your loved ones want, Americans can lessen the stress and feel more prepared for the curveballs life is known to thrown.”