Most seniors in America can’t afford nursing homes or assisted living, study finds

Raj April 28, 2023

38 5 minutes read

As many as 80% of growing old adults in America lack the monetary assets to pay for 2 years of nursing residence care or 4 years of an assisted residing group.

That’s in accordance with a brand new study from the National Council on Aging (NCOA) and the LeadingAge LTSS Center on the University of Massachusetts Boston.

Additionally, 60% of older adults — or 24 million households — wouldn’t have the funds to pay for in-home long-term care, although they would favor to “age in place,” per a report from NCOA.

Researchers analyzed 2018 information from the Health and Retirement Study, which was a joint effort by the National Institute on Aging and the Social Security Administration that surveyed some 20,000 U.S. adults about their internet wealth.

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When the researchers first started trying on the information a number of years in the past, they had been initially shocked to see that so many older adults had been at important threat of monetary insecurity, Dr. Jane Tavares, a lead researcher on the LTSS Center at UMass Boston, informed Fox News Digital.

“There is a common misconception that older adults are asset-rich, but we have found in our research that this is not generally true,” she mentioned.

Up to 80% of growing old adults in America lack the monetary assets to pay for 2 years of nursing residence care or 4 years of an assisted residing group, a brand new study discovered. (iStock)

Dr. Tavares additionally famous, “We expect that there will probably be some worsening once we examine data for the time period covering the COVID pandemic.”

Rising prices of assisted residing

The nationwide common value for assisted residing is round $4,500 monthly, in accordance with the 2021 Cost of Care Survey from Genworth, a Virginia-based firm that helps older adults with monetary planning.

“The cost of assisted living can vary significantly depending on the location and level of care needed,” mentioned Dr. Steven Norris, a senior well being and care professional who can also be the medical director at Transitions Care in Chicago, Illinois.

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“As the population continues to age and demand for these services grows, it is likely that the cost will continue to rise,” he mentioned.

With the widespread scarcity of certified caretakers, services are having to pay extra to safe the best folks, the physician defined.

“For decades, there has been a lack of awareness of how expensive assisted living really is.”

“Additionally, recent increases in minimum wage requirements and changes in overtime payment legislation are increasing assisted living costs,” he mentioned.

The value might vary from $3,000 in rural areas to $7,000 to $9,000 in city areas, famous Bennett Kim, a senior housing professional and CEO of Las Vegas-based ZNest. It’s a web-based platform designed to assist older adults discover locations to dwell.

Upscale assisted residing could possibly be larger than $12,000 monthly.

The altering retirement mannequin has additionally contributed to gaps in financial savings for America’s senior residents, specialists say. (iStock)

“For decades, there has been a lack of awareness of how expensive assisted living really is,” Kim informed Fox News Digital.

“Some people thought health insurance would cover long-term care costs, while other people optimistically believed that they would live a healthy life forever.”

The pandemic hasn’t helped issues, because the business noticed a surge in working bills, Kim mentioned.

Middle-aged and older adults are dealing with a really completely different monetary panorama than the generations earlier than them did.

“Assisted living companies had to continually raise prices just to keep up with their costs, but retirees did not see the same growth in savings or investments,” he added.

Several components contribute to monetary struggles

Middle-aged and older adults at the moment are dealing with a really completely different monetary panorama than the generations earlier than them did, Tavares identified.

“For starters, greater longevity comes with a higher cost, as well as a higher risk of facing serious chronic health conditions,” she informed Fox News Digital.

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Additionally, the will increase in family earnings and property haven’t been giant sufficient to maintain up with the rising prices of residing, well being care and inflation, she added.

And even when older adults do have property, they’re typically tied up in property and never available to assist them cowl prices, Tavares defined.

The nationwide common value for assisted residing is round $4,500 monthly, in accordance with a 2021 survey. Cost varies relying on location and the extent of care wanted. (iStock)

The altering retirement mannequin has additionally contributed to gaps in financial savings.

While previous generations had personal, employer-sponsored pensions that supplied predictable funds, many Americans now depend on 401(Okay) accounts, which depart people liable for saving sufficient cash to cowl their retirement years, Tavares mentioned.

“With all of this combined, few older adults have any kind of significant savings in retirement accounts — and most can’t afford long-term care insurance that would help cover the expensive costs of assisted living or nursing home care,” she defined.

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“This means there is a greater reliance on Social Security income and social safety net programs like Medicaid.”

Potential options exist — however many seniors aren’t conscious of them

There are over 2,500 public state and federal profit applications designed to spice up older adults’ financial safety — however lots of them should not getting used to their full extent, in accordance with Tavares.

“Many of these programs are under-enrolled, with individuals not realizing they exist or not knowing about their eligibility status and how to apply,” she informed Fox News Digital.

“There is a common misconception that older adults are asset-rich.”

In 2020, an estimated $30 billion of public advantages went unused every year, per the National Council on Aging.

“These programs are an important buffer for financial insecurity, and it’s critical that they are properly utilized and maintained by state and federal governments,” Tavares mentioned.

Sixty p.c of older adults — 24 million households — wouldn’t have the funds to pay for in-home long-term care, the study discovered. (iStock)

Education is seen as one other key element of enhancing seniors’ monetary stability.

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“This means educating individuals about retirement savings and strategies for determining when to file for Social Security that take into consideration their sources of retirement income/savings, health and realistic retirement goals,” Tavares mentioned.

“Individuals need to be thinking about and preparing for how they will weather a likely financial shock as they age,” she added, “and policymakers need to be prepared for the heavy financial burden that will likely fall on public state and federal benefit programs and begin crafting solutions for handling that burden.”

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Some older adults might have the choice to faucet into their residence fairness to fund their retirement, however Tavares mentioned they want assets that assist them perceive and navigate that course of.

“Individuals need to be thinking about and preparing for how they will weather a likely financial shock as they age.” (iStock)

There can also be a transparent want for policymakers to enhance long-term care protection, in accordance with Tavares.

“With private long-term care insurance being unaffordable for most older adults, it is key to begin considering combined public and private initiatives that can put the cost of coverage within reach and make it more appealing to consumers,” she mentioned.