An economist says disability and living alone are bigger financial risks than aging. (Photo: Thinkstock)

The typical 80-year-old woman in the United States may have enough financial resources, including home equity, to pay for about 20 months of nursing home care, or 35 months of home health care.

An 80-year-old woman in the top quarter in terms of income and wealth may be able to pay for 58 months of nursing home care and about 103 months of home health care.

Jason Brown, an economist at the U.S. Treasury Department, included those figures in a major new report on the economic security of older women in the United States.

Brown offers no recommendations about specific products or tax changes the Treasury Department should support, but he said policymakers should think more about helping older women who live alone and those who are disabled, rather than thinking in terms of helping all older women. 

“Aging per se poses much smaller economic risk under the current system compared with the risks associated with disability and living alone,” Brown writes.

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Older women who stay healthy and stay married tend to be economically secure. But those who are widowed, who are never married or who become disabled tend to go through hard times, Brown says.

“Few households have the ability to cover an extended disability spell,” says Brown, who also touches on private annuities and private long-term care insurance in the report.

Private annuities can provide the same kind of payout that Social Security or a private pension plan provides, but they “are not widely used,” Brown says.

He seems to overlook the existence of health- and disability-related annuity benefits triggers. At one point, he says annuities are “imperfect sources of insurance coverage for specific risks” because the “payouts are not triggered by considerations other than age.”

Brown says older women have an unmet need for help with long-term care risk.

The federal government has not succeeded at expanding its role in paying for long-term care in recent years, and private-sector insurers are also having trouble in that sector, Brown says.

“Only 12 percent of the over-65 population is covered by long-term care insurance, and recent struggles in the long-term care insurance market have limited the product’s ability to provide coverage to a larger share of the population,” Brown writes.

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