This Threat Scares Investors More Than the IRS: Lincoln Financial

U.S. investors may be a little nervous about taxes, inflation and longevity risk, but they’re really scared of long-term care and elder costs.

Analysts at Lincoln Financial Group have put data supporting that assessment in a summary of results from an online survey of 1,991 U.S. adults ages 18 and older.

(Related: How Emotions Are Affecting Financial Confidence During Pandemic)

All of the participants in the sample had at least some familiarity with financial planning and investments, and all had a role in the purchase of financial and investment products. Lincoln completed the survey in December — before COVID-19 was making news outside of China.

Lincoln conducted the survey to find out what consumers were thinking about tax planning.

The Radnor, Pennsylvania-based company provided a long version of the survey results at a reporter’s request.

Lincoln found that typical survey participants believe they have their income taxes under control.

The company asked the participants to say whether they felt very prepared, somewhat prepared, or not prepared to handle six major financial issues: income taxes, estate taxes, medical expenses, the rising cost of living, living to an old age, and long-term care or elder care.

Here’s how likely the participants were to say they were not prepared to handle each of the issues, ranked from least to most:

• Income taxes: 18%
• The rising cost of living (inflation): 23%
• Medical expenses: 23%
• Living to an old age (longevity risk): 24%
• Estate taxes: 33%
• Long-term care or elder care: 44%

In other words, life insurers may have had a hard time closing stand-alone long-term care insurance (LTCI) sales, or making the policies they sold turn a profit, but consumers know the need for long-term care planning is still there.