Many are aware of the costs of long-term care (LTC) and the possibility of their future LTC needs, but few are actively saving, says a new Northwestern Mutual study.
Although 77% of Americans acknowledge the increasing need for LTC planning, nearly half, at 45%, say they’re “not sure” how they plan to address future LTC needs, the study reveals.
And, while 62% of people believe the costs of LTC services will rise faster than the return on their savings, and 53% believe costs will double in the next 14 years, only 28% are currently saving for future LTC needs.
“There is a clear disconnect between what Americans understand about long-term care needs and the steps they’ve taken to prepare,” said Steve Sperka, Northwestern Mutual vice president of long-term care, in a statement. “In order to create flexibility and options in retirement, people need to address long-term care risk as part of financial security planning.”
However, people who have experience in caregiving are more likely to have a plan, says the survey. In fact, they’re almost twice as likely to have discussed LTC options with family and friends, at 43%, compared to just 23% who have no caregiving experience.
And, at 30%, they’re much more likely to have addressed their LTC needs within their retirement plans, compared to 17% of those who haven’t given care, and are more likely to understand their options and the resources available when it comes to LTC planning, at 56% vs. 34%.
“First-hand experience as a caregiver appears to be a reality check for many Americans,” says Sperka. “They’re more likely to recognize that deliberate planning steps early on alleviate a great deal of unnecessary stress, giving families important choices and some control in otherwise overwhelming situations.”
View Northwestern Mutual’s Long-Term Caregiving Study here.
Written by Alyssa Gerace