The dramatic financial, mental and health impacts resulting from the COVID-19 pandemic have pushed many Americans to reexamine the importance of prioritizing long-term care, new survey results show.
Since the pandemic started, nearly a third of respondents across generations worry more about being able to afford long-term care in the future and having a plan for LTC for themselves, according to the Nationwide Retirement Institute’s new long-term care survey. This includes 36% who worry more about their financial stability, 30% who worry more about their retirement plans and 30% who worry more about being able to afford future LTC costs.
In addition, the vast majority of respondents (87%) believe it’s more important than ever for people to live at home for long-term care, as well as have LTC insurance (81%), as COVID-19 has raised concerns about the safety of nursing homes.
That said, less than half of adults feel knowledgeable about how much LTC costs are. Moreover, a solid majority of adults admit that they are not able to estimate how much annual LTC costs could be, particularly when asked about specific options, such as costs associated with assisted living, adult day care and home health care. Among those who provided an estimate, perceived costs vary widely, with Boomers on average estimating overall costs will be significantly higher at $55,442 annually, compared to Millennials and Gen Xers, who estimated $31,863 and $35,451, respectively.
According to 2020 data by Genworth, the annual median costs for in-home care services is $53,768, for adult day care is $19,240 and for a semi-private room at a nursing facility is $93,075.
Caregivers in Crisis
“Most adults (71%) would prefer to receive care in their own home for long-term care. In fact, half (50%) believe it is a family’s responsibility to provide care,” notes Holly Snyder, president of Nationwide’s life insurance business. “That said, there is widespread concern among most adults that they will become a burden as they age (63%).”
In fact, among caregivers, a majority of Millennial and Gen X caregivers are currently providing care, whereas a majority of Boomers provided care in the past. Moreover, Millennials are more likely than Gen Xers and Boomers to be providing financial support for a parent, while Gen Xers are more likely than Millennials and Boomers to be financially supporting an adult child.
Furthermore, those who say caregiving has impacted their ability to save most commonly report they haven’t been able to put money into their savings account (73%) or to save for retirement (58%).
And while a majority of existing caregivers feel they should be able to be a caregiver without dipping into their savings to cover day to day expenses, Millennials and Gen Xers, in particular, are afraid that caregiving expenses will keep them from ever retiring, at 64% and 52%, respectively.
Caregivers also estimate that they are spending a part-time job’s worth of time and money providing care. While the estimates vary by generation, Millennials report spending the most out-of-pocket money annually at $7,258, compared to $6,123 for Gen Xers and $3,243 for Boomers. As for time, Boomers report spending the most time caregiving, at nearly 44 hours per week, compared to both Millennials (28.5 hours) and Gen Xers (21 hours).
“The pandemic and its accompanying restrictions have put a strain on most current caregivers’ ability to provide customary care for their loved ones and the majority have taken a hit financially,” adds Snyder. “In fact, our survey reveals more than six in 10 current caregivers (64%) say the pandemic has impacted their financial ability to provide care.”
LTC Planning
While most adults say the pandemic has made it more important than ever to have LTC insurance (81%), not nearly as many have talked about long-term care with family members (41%) or have LTC insurance in place (8%).
Snyder says a silver lining from the pandemic could be that more conversations around long-term care are starting to happen. “Amid the uncertainty caused by the pandemic, it is more important than ever for adults and caregivers alike to have in-depth conversations with family members and financial professionals to ensure they are strategically planning for long-term care costs,” she emphasizes.
“The good news is that over 4 in 10 adults with a financial professional (44%) are working with him or her for the first time as a result of the COVID-19 pandemic—especially Millennials (70%) and Gen Xers (53%).”
The online survey was conducted within the U.S. between Aug. 25 and Sept. 16, 2020, among 959 adults aged 24 and over by The Harris Poll on behalf of the Nationwide Retirement Institute. The survey also included 308 adults age 24 or over who are or have been caregivers.
