A new study focuses on the savings rate that people in a workplace retirement savings plan need in order to achieve a more secure retirement.
By Cyril Tuohy
A new study by Northwestern Mutual found that while many Americans don’t have a plan for long-term care, people who think about funding their own long-term care needs are getting younger as more families deal with aging parents or friends.
The “Long-Term Caregiving Study” found that as many as 41 percent of Americans are either unsure of how they will handle long-term care, or do not address it at all. Yet, the study also found that 18 percent of respondents have provided or are currently providing long-term care for a family member or a friend.
“People are living longer, so the need for care is very real,” Steve Sperka, Northwestern Mutual vice president of long-term care, said in a statement. “Planning ahead and putting solutions in place for potential care needs gives families options and helps protect retirement nest eggs.”
Planning for long-term care is often the best option for activities surrounding long-term care. Providing such care leads to more stress. A total 42 percent of survey respondents said providing care was physically draining or demanding.
Many families need to make sacrifices for long-term care and that has prompted even younger generations to take action. A full 36 percent of 18- to 34-year-olds said they were most likely to be saving for their future long-term care needs, the survey found.
“Younger people are more aware today of the effects that long-term care issues could have on their lives, especially if they find themselves in a caregiving role,” Sperka said. “As a result, they’re taking a more proactive approach to addressing and planning for their own future needs.”
For years, long-term care has taken a back seat to the many government policies aimed at reforming the nation’s health care system. As a result, there has been a minimum of planning around coordinating the delivery of long-term care. That is beginning to change as the population ages.
Many people continue to underestimate the expense of long-term care and don’t know where funding for long-term care comes from, the survey also found.
A total of 43 percent of U.S. adults believe that their long-term care expenses will be covered by Medicare or Medicaid, their regular health insurance policy or disability coverage, although that often isn’t the case.
Private long-term care insurance is available but prices have gone up as the supply of long-term care insurers underwriting the policies has decreased.
Harris Interactive conducted the online survey of 2,028 adults 18 or older from Oct. 7 to 9. Of the respondents, 344 described themselves as long-term caregivers.
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at Cyril.Tuohy@innfeedback.com.
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