As many as 8 million people use some form of long term care annually.
Taking care of an aging parent is a growing challenge for the so called “sandwich generation.” An estimated 6 million informal caregivers, including family members, friends and neighbors, are involved in giving care to seniors to assist with daily activities.
Spending on long term care services is about 9.3% of annual healthcare expenditure, about $219 billion. With costs of a private nursing home room averaging about $70,000 dollars annually, many are simply financially unprepared for the monetary stress long term care imposes.
Long Term Care Affects Many
Take a second to reflect on your own life. So many of us have been touched by it in one way or another. We’ve all had a loved one or friend of a loved one placed into a nursing home, assisted living center, or have seen a friend struggling at home to keep up with the demands of caring for a family member.
Even though we see long term care affecting so many around us, too many believe that it won’t happen to them. They believe they will not have to be in a nursing home, that some ailment will not debilitate them as they age. While we all like to believe we are invincible, that is not reality. An estimated 1 in 4 Americans over the age of 65 will need some form of long term care.
The Family Burden
Paige* was 40 year old mother of three who worked full time.
Her mother suffered a stroke, leaving her with no muscle control over the left side of her face, and nearly paralyzed on the left side of her body. She lost her ability to speak. Paige’s family was devastated. Once the shock subsided, the family had to decide how they would care for their mother.
Paige was one of five children, and getting all the siblings to agree on a type of care imposed a great deal of stress. They quarreled, wrestling with their mother’s prior wish to never be in a nursing home and the fact that none of them were qualified enough to give their mother the care she needed.
The family ultimately decided a nursing home was the best form of care. This came with its own set of challenges. Paige visited her mother everyday. Between her full time job, picking up her elementary school aged daughter from school, and attending her older sons’ sports, she found the time to make sure her mother had her needs met in the nursing home.
Despite all of this, Paige was lucky. She had a job which allowed her flexiblity so she could tend to her mother, as well as siblings who were willing to share in the work of caring for her mother. Too many times, the burden falls on one family member, with others being unwilling or unable to help. Other times, the family member has to leave their job to care for their loved one, as an estimated 78% of care is received from relatives. An estimated 2 out of 3 informal caregivers are women with children, and 40-70% of all caregivers have significant symptoms of clinical depression. With kids, careers, and the rest of life still moving forward, caring for a loved one places a great deal of emotional and financial stress on the family caregiver.
If THEY don’t plan, YOU are the plan.
One in five older people will spend at least $25,000 out of pocket expenses on nursing home care, home health care, or assisted living throughout their lifetime. In addition, female caregivers can expect to lose $324,000 in wages and Socail Security benefits over a lifetime. Although this kind of financial burden is looming in the distance, as many as one in four people over the age of 45 are not financially prepared if they were to need long term care.
There are only two ways to be sure you are prepared if you or a loved one suddenly needed long term care.
The first is to do proper long term care planning, which could include long term care insurance or non-traditional long term care insurance, which is becoming very popular. Medicaid covers only an estimated 49% of nursing home costs, and will require you to use up valuable assets before you qualify. With the price of care climbing, a good plan needs to be in place to cover these additional costs. A long term care plan, traditional or nontraditional, could alleviate the financial burden.
The second is to have sound retirement planning. Proper asset allocation and a sound financial plan can leave you with the emergency assets necessary to cover the cost of care.
Without the assets to pay for long term care, the final plan of the elderly will be their children. About 78% of those who needed long term care received it from family members. This imposes a great deal of stress on your loved ones, especially if they are caring for their own children. The emotional pressure puts a strain on all areas of their lives.
So plan. Talk about the future. Be honest about the statistics. We all know someone affected by long term care, and we need to realize that person could be us. We need to have a plan in place, for the sake of our loved ones and ourselves.
*Name changed to protect identity.
