Long-Term Care: More Than a Health Issue 



As the lifespan of the average American has lengthened, so too has the time people spend in retirement. Healthy retirees can realistically expect to spend 20 or even 30 years in retirement. This trend, coupled with the ever-rising cost of health care and nursing home care, can become a very significant factor in planning for a financially secure retirement. 


As Americans struggle to get financially prepared for retirement, many underestimate the expenses associated with health issues as they age. 


According to two studies released by Prudential Financial, Inc. earlier in 2005 -- the "Workplace Report on Retirement Planning" and "Roadblocks to Retirement" -- 7 in 10 Americans feel rapidly rising health care costs in the recent past have hurt their prospects for a comfortable retirement. In addition, the research found that 2 in 10 anticipate they might need nursing home care in the first 10 years of retirement; when considering the second 10 years of retirement that number swells to more than 4 in 10. 


Rising Costs, Rising Concerns: 


According to the research, among those who expect to need nursing home care in retirement, more than 9 in 10 are concerned that they could exhaust their savings. For those closest to retirement, their most important goals are to remain financially independent and not become a burden to loved ones. In fact, 7 in 10 near-retirees feel it is "very important" to be able to afford necessary medical care or nursing home care. 


Long-term Care Insurance Remains a Mystery to Many: 


Although the public is increasingly aware of long-term care needs, long-term care insurance is not yet well understood. Even among those who are closest to retirement age, just 1 in 5 claims to have a sound understanding, and nearly half need help with understanding the coverage and options. 


Here are a few tips to help you get started when considering the benefits of a long-term care insurance policy:

  • Research the current costs of long-term care in your community and how those costs are likely to grow over time.
  • Consider how you would pay for long-term care if you needed it today.
  • Determine how much of your retirement savings and income you'd be willing and able to spend on long-term care services such as home care (home modifications, home health aids), care in a nursing home, or care in an assisted living facility.
  • Investigate your options for purchasing discounted long-term care insurance in a group plan, through your employer or association, or individually, through a financial professional.
  • Buy long-term care insurance from an established company with financial strength and stability.



The elderly population, many of whom could require long-term care services, will more than double in population over the next 25 years to more than 70 million. With the costs of nursing home care running $61,000 a year on average, it is prudent for Americans to make long-term care insurance a part of their overall retirement and financial planning to protect their assets, their choice of care and their independence should the need for long-term care arise. 


-Compiled through ARA News Service Reports 


------------------------------- For those wishing more information or copies of the long-term care reports, "Workplace Report on Retirement Planning" and "Roadblocks to Retirement" visit Prudential Online at: www.prudential.com


The firm also offers a free cost estimator to better determine current costs of long-term care in your community and how those costs are likely to grow over time at: www.prudential.com/insurance/longtermcare 


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