Employee Benefit Research Institute’s recent finding that workers and retirees both have low confidence in their ability to pay for long term care costs is scary.

The study found that the percentage of retirees who are very confident about their ability to pay for LTC costs has fallen to 15%, from 24% in 2008, and that the percentage of workers who are very confident about this has fallen to 10%, from 13%.

[That's based on a telephone survey of 1,001 U.S. workers ages 25+ and a related telephone survey of 256 retirees. See our recap here. To view more details, visit EBRI's retirement survey section here.]

Those aren’t encouraging numbers, especially since the percentages have trended down since 2004, the first year of the survey. In 2004, the percentages were 15% and 30%, respectively.

The 2009 results likely reflect the overall erosion in confidence brought about by the recession. That’s understandable. Still, the figurs demonstrate an awful fact, that many people are losing their sense of security concerning their retirement years.

One has to ask, where will this lead?

Specialists in LTC insurance should definitely be asking that question. After all, the planning they help facilitate and the insurance products and services they sell are, or should be, antidotes to declining confidence.

No one LTC plan and no one LTC product will lift the spirits of people who do not believe they will be able to afford long term care. But, when combined with other plans and financial products, such planning and products can certainly help.

It goes without saying that workers who have lost their jobs or taken pay cuts due to the recession are not going to put LTC planning on their personal front burner. They are more concerned with food on table, roof overhead, and clothes on back. The same can be said for retirees who are seeing their retiree health benefits slashed or dropped, and their health care and housing costs rise.

Still, many people are still working, and they are probably more future-security-conscious than ever–exactly because of the consequences of recession all around them.

A new report from Age Wave, sponsored by Allianz Life Insurance Company of North America, Minneapolis, has data in support of that. The researchers found that 40% of the sandwich generation–those who are raising children and caring for parents at the same time–worry about whether they will have to provide financial support to their parents or in-laws.

If so, we might ask by way of extension, will the sandwichers have money left to fund their own care in their senior years?

For certain segments of the United States population, the lack of confidence detected in the EBRI survey and the worry detected in the Age Wave report may turn out to be the very incentives people need to start LTC planning in earnest.

But it will take a trained LTC expert to drive the point home. After all, when mired in doubt and despair, most people need someone else–preferably a trained expert–to help them envision a brighter future and to move toward it with confidence.

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–Linda Koco, Managing Editor, Products and Managing Editor,
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