Many adults will eventually need some form of living assistance in their elder years. Considering the costs of services such as assisted living and nursing homes, as well as the fact people are living longer, the costs of financing long term care becomes important in financial planning.
New resources to help you plan
One option is to consider the new Community Living Assistance and Services Act or hybrid long-term care insurance. According to the National Clearinghouse on Long Term Care Information, planning for long-term care is important because there is a good chance you will need some long-term care services if you live beyond the age of 65. About 70 percent of people over age 65 require some services. The older you get, the greater the chance that you will need long-term care.
Planning is also important because long-term care can be very expensive, and Medicare and other health insurance programs don’t cover many long-term care services. The cost of long-term care services is often more than what the average person can pay from personal income and savings. Planning ahead gives you the time to save for your long-term care needs or to find the payment options that work best for you if you need services.
Planning helps you understand:
- Services available from your family and in your community
- Special conditions (such as age or income) that may apply for receiving services
- Costs of services
- Public or private payment options available to you
This information helps you understand your options, and makes it more likely that you will be able to get and pay for the services you need and prefer.
Chances are good you will need some type of care
About 70 percent of people over age 65 will require some type of long-term care services during their lifetime. More than 40 percent will need care in a nursing home. Things that increase your risk or make it more likely that you’ll need long-term care include:
- Age: The older you get, the more likely it is that you’ll need help.
- Living alone: If you live alone, you’re more likely to need paid care than if you’re married or single and living with a partner.
- Gender: Women are more likely to need long-term care than men, primarily because women tend to live longer.
- Lifestyle: Poor diet and exercise habits increase the chance that you’ll need long-term care.
- Personal history: Health and family history can increase the chances you’ll need long-term care.
How Much Care Will You Need?
Service and support needs vary from person to person and often change over time.
- On average, someone who is 65 today will need some type of long-term care services and supports for three years.
- Women need care longer (on average 3.7 years) than men (on average 2.2 years), mostly because women usually live longer.
- While about one-third of today’s 65-year-olds may never need long-term care services and supports, 20 percent will need care for longer than 5 years.
If you need long-term care services and supports, you may receive or use one or more of the following:
- Assistance with personal care or other activities from an unpaid caregiver who may be a family member or friend
- Services in your home from a nurse, home health or home care aide, therapist, or homemaker
- Services in the community such as adult day services
- Care in any of a variety of long-term care facilities
The table below shows that, overall, more people use long-term care services at home than in facilities. Also, people use long-term care services longer at home than in facilities.
Distribution and duration of long-term care services
Type of care
Average number of years people use this type of care
Percent of people who use this type of care (%)
|Any Services||3 years||69|
|Unpaid care only||1 year||59|
|Paid care||Less than 1 year||42|
|Any care at home||2 years||65|
|Nursing facilities||1 year||35|
|Assisted living||Less than 1 year||13|
|Any care in facilities||1 year||37|
As you are making decisions on long term care, consider the information above on the number of people that will require a certain level of care and how long, on average, they require that care. Using this information you can readily obtain information on annual costs for the various types of care and then calculate possible costs for various levels of care.
This information will be helpful in making decisions on whether a long term care insurance plan is in your best interest, or if you are younger, if a medical savings account or larger contributions to an IRA or 401-K program may be a better investment for the future.