A new study from Northwestern Mutual shows a disconnect between those that believe there is a need for long-term care and those actually planning for their own future long-term care.
Three-quarters of Americans believe that as people live longer, the need for long-term care planning is greater, according to Northwestern Mutual’s 2014 Long-Term Care Study released on Wednesday.
“Our study confirms that long-term care can have significant financial and lifestyle implications,” said Steve Sperka, vice president of long-term care at Northwestern Mutual, in a statement. “As the need continues to grow — the U.S. government estimates that 70% of Americans who reach the age of 65 will require some form of LTC — a disciplined approach to planning for your own longevity needs as well as those of loved ones should be a priority, not an option.”
However, the percentage of people addressing long-term care needs within their retirement plans is drastically lower. About one in four (26%) of those surveyed say family members have addressed long-term care needs within their retirement plans.
Others are relying on other methods for their long-term care — savings, friends or family, retirement communities or long-term care insurance, according to the study.
Of the 61% of Americans that said they have an idea of how they will address their long-term care needs, slightly fewer than 1 in 4 have long-term care insurance or are considering it.
Most are relying on savings and friends or family. According to the study, about one in three consumers (35%) is saving for her own future long-term care needs, while 19% said they “anticipate my friends/family will take care of me.”
But there are still about two in five consumers that have not taken steps to plan, of which 12% said they “do not plan to address long-term care needs.”
“The good news is that people do have long-term care options, and the first step is a candid conversation with a partner, parent or relative,” Sperka said in a statement.
The study found that less than 2 in 5 consumers (37%) said their family members have shared their preferences for long-term care options with them.
“Once there is a mutual understanding, an experienced advisor can tailor a strategy to help protect income and assets, providing families with clarity for the future,” added Sperka in a statement.
The study also examined the impact long-term care requires of long-term caregivers, often family members.
Approximately 1 in 3 consumers have been a caregiver or expect to be a caregiver in the future, the study states. Of both experienced caregivers and future caregivers, “having less time for family/friends/self” was cited as the most common consequence of long-term caregiving.
The second most common consequence was changes to the caregiver’s own budget/retirement plan. More than half (56%) of future caregivers cite impact on their budgets and retirement plans as a consequence of caregiving.
This survey was conducted online within the United States by Harris Poll on behalf of Northwestern Mutual from Sept. 29 through Oct. 1 among 2,016 adults ages 18 and older.
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