A recently published study by the non-profit organization, Volunteers of America shares insight on the true cost of long-term care in America and the increasing financial strain that it has put on unpaid family caregivers. The survey additionally finds that the American public is largely unaware of their inability cover the cost of long-term care and neglect to plan for long-term care in their retirement savings.
Their report, “Boomer Bust 2011: Still Unprepared and Unaware” details these key findings:
- Up to 75% of people will need long-term care, for an average length of 3 years
- Long-term care costs range from $40,000/year – $80,000/year
- The average savings gap for retirees is $250,000 (near the equivalent of 3 years of care)
When you consider that Medicare will not cover long-term care and that the primary financial support for most Americans in this regard (Medicaid) forces many to liquidate assets before qualifying, it is no wonder that more families are having to step in and provide support as an unpaid caregiver.
The study shows that on average, caregivers spend 21-hours/week caring for a loved one. Greatly diminishing their ability to sustain previous levels of income and further worsening their financial situation by forcing many to take on the additional cost long-term care.
The added burden on the caregiver is expected when you consider:
- Only 60% of employed people are currently saving for retirement
- 54% report that their total savings and investments are worth less than $25,000
- While 27% said they have less than $1,000 in retirement savings
- Only 46% report that they have even attempted to calculate the cost of retirement
- 33% expect to retire after the age of 65 (but many do not consider the likelihood of becoming ill before retirement)
With knowledge of the impending wave of 78 million baby boomers, it is likely that inaction will only worsen the financial hardships for America’s unpaid caregivers. The study concludes with a call to action for additional planning and education on the cost long-term care, at the state and federal level; as well as an appeal for financial support to be extended to unpaid family caregivers.
