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.