Boomers underestimate their longevity, LTC costs

Survey respondents were accurate in their estimation of how much it costs on average for one year of nursing home care: $66,949. However, they failed to see clearly into the future, underestimating the costs in 2030 (when they will actually need it) by more than half.

The survey also uncovered confusion and misconceptions about what LTC actually entails. Of the 813 retired and nonretired Americans age 50 or older with at least $150,000 in annual income or investable assets who were surveyed, 75 percent reported they consider LTC to be nursing home care or assisted living when a significant amount takes place in the home.

Interestingly enough, 65 percent of respondents reported that LTC was there top concern when planning for retirement, while 57 percent said they do not account for LTC expenses, and only 47 percent have sought LTC information. 

Baby Boomers, many with inadequate—or even negative—retirement and LTC savings, will inevitably have to answer a question that has become popular recently when it comes to medical care for the aging: Stay in the U.S. and receive adequate care and likely take on debt to pay for it or travel to a foreign country and receive excellent care at a fraction of the cost? As the chart illustrates, many are not saving enough for potential medical needs in the future, which points to a possible surge in medical tourism.