Caregiver's Home Companion Free captioning phone for those with hearing loss.
 HOME PAGE  SEARCH Go

Posted: July 01, 2008

Old-Age Care Costs Soar: Study

As if today’s economic pressure were not enough, tomorrow’s needs for old-age care may leave us staggering. That’s the assessment of research predicting that today’s 65-year-old will need nearly a quarter of a million dollars to cover their elderly medical costs. 

The figures are part of a study by Fidelity Investments looking at the impact of health care costs, including long-term care costs, can have on a retiree’s health as they age. The bottom line: the costs are significant and getting more so.

 

advertisement
Drive Longer, Stay Independent
The study finds that many baby boomers will need $85,000 just to cover insurance costs in their later years, while today’s new retiree will be faced with about $225,000 in out-of-pocket costs to handle their old-age healthcare expenses – an amount not many Americans have in their retirement nest egg.

Fidelity, a Boston-based financial services firm, said the nearly quarter-million dollars is just to cover continuing expenses such as Medicare premiums, co-payments and deductibles, and out-of-pocket expenses for prescription drugs.

The $85,000 insurance figure is in addition to the $225,000 for other health care needs. It is intended to cover the cost of long-term care insurance, which can be used to pay for everything from regular visits to a home by a professional caregiver to living in a nursing home, Fidelity said. Current nursing home care for a private room for one year is estimated on average at $76,000.

“Most long-term care policies do cover home care, so that would enable a person to stay in their home longer, and I think a lot of people don't realize that that's an option that's out there for them,” said Joan Bloom, a Fidelity senior vice president.

“They can range from a minimum of $1,000 a year, all the way up to $7,000, and it's dependent on the age you buy the policy as well as your current health at the time you buy the policy,” she added.

About 5 million Americans are covered by long-term care insurance, a number that has remained basically flat over the last 10 years, Bloom said. While some employers provide benefit programs offering long-term care coverage, the cost generally isn’t subsidized by employers.

 

Bloom recommends people consider buying long-term care insurance when they’re in their 50s, as policies generally cost less the earlier in life they’re purchased.

 

For its study, Fidelity surveyed insurers offering long-term care policies to come up with the estimate that a couple aged 65 this year can expect to need $85,000 to cover annual premiums for long-term care coverage throughout retirement. (Fidelity, which deals primarily in mutual funds, does distribute long-term care insurance issued by an unaffiliated firm, Genworth Financial.)

 

The survey also looked at the cost of elder-caregiving on younger, employed family members.  “We estimate that it can cost the person, the caregiver, up to $140,000 in lost income and benefits over their lifetime,” said Bloom.

 

Bloom based her comments on a 50-year-old earning $50,000 per year who provides four years of long-term care to a family member. She said this person stands to lose more than $140,000 in wages, retirement savings and Social Security over their lifetime.

 

This is the first year that Fidelity conducted its survey.

Email or share this story Bookmark and Share

Search CaregiversHome
Find with keyword(s):

Enter a keyword or phrase to search CaregiversHome's archives for related news topics, the latest news stories, timely times, and reference articles.

© 2008 Pederson Publishing, Inc. All Rights Reserved.
Commercial use, redistribution or other forms of reuse of this information is strictly prohibited without the prior written permission of Pederson Publishing.

_____

View The Caregiver's Hotline in which this article first appeared

Back to Top

Privacy Statement Contact Us Site Map Products & Services Our Partners Advertise
© Copyright 2003-2020. Pederson Publishing, Inc. All rights reserved.