Financing long-term illness care is an integral part of proper retirement planning, yet most Americans fail to plan for it because they are afraid to even talk about long-term care, according to a new survey sponsored by Genworth Financial.
The survey, entitled “America Talks: Protecting Our Families’ Financial Futures,” found that relatively few Americans have even discussed with their families the kind of long-term care they would wish to receive if it were needed, said Colleen Goldhammer, senior VP of long-term care at Genworth.
“When it comes to retirement planning, long-term care becomes a more emotional [issue] than financial,” Goldhammer said. “We undertook this survey because I have spent the better part of a decade talking to advisors and the financial community about having the long-term care conversation and trying to integrate it into the financial and retirement planning experience.”
The survey sought to dig deeper into the reasons why Americans avoid planning for the costs associated with living longer lives, and its results revealed some important psychological barriers preventing them from talking about preparing for an unforeseen long-term care event. While the majority of survey participants wanted a financially secure retirement, being uninsured in a world of rising healthcare costs was a major concern. But over half of the survey participants also said that being a burden on their family would be their greatest worry in the event they could no longer care for themselves. Surprisingly, death itself was of little concern, with only 10% of respondents citing their demise as a worry. However, 90% of survey respondents said they were not confident of being able to pay for long-term care.
Advisors, however, can play a key role in helping their clients realize the importance of planning for an unforeseen long-term care illness if they are able to eliminate the psychological barriers that prevent them from having the discussion in the first place, Goldhammer said.
“Given the current economic situation, we have a new reality when it comes to retirement planning and we need to add to that rising healthcare costs, so clients are turning more to their advisors to get the help they need,” she said.
To help facilitate the difficult dialogue surrounding long-term care planning, Genworth last year launched a campaign called “Let’s Talk,” with resources for both advisors and consumers, Goldhammer says. Available off Genworth’s main Web site, the company offers advice on how to break the ice with family members; get guidance from experts and helpful ‘Do’s and Don’ts,’ as well as advice from individuals who have already taken the first step of discussing long-term care with their own families. Using these resources, advisors can help their individual clients tackle such important questions as deciding what sort of long-term care they would want; defining the roles of different family members if a situation should arise in which long-term care is needed, and how much long-term care will cost the family.
“We present this in a way that makes people realize that we are not talking about long-term care products or insurance, but about long-term care planning,” Goldhammer said. “As people go through the process, they have multiple solutions in terms of long-term insurance products that are available in the market, but the important part of this campaign is that they will at least have started the conversation about getting a long-term care strategy in place.”
According to the Genworth LTC survey, an overwhelming number of people expressed their desire to have long-term care, should they need it, in their homes. However, the possibilities of that have been greatly reduced, Goldhammer says, and there’s likely to be even more of a “caregiver crunch” going forward, since more and more people–women in the workforce in particular–are less available to provide long-term care.
“The conversation has to be had and people need to think of planning for long-term care needs in the same way as they would think of putting in place a strategy for their will,” Goldhammer says. “I do believe that the long-term care planning discussion has to be part of the retirement planning discussion.”
Genworth put out the survey with San Francisco-based Age Wave, the company founded by Ken Dychtwald that conducts research on the aging population.