The New Rules of Retirement

Chapter 7Dealing with the Crisis in Long-Term Care

Long-term care (LTC) is a great American paradox. On the one hand, most people don't want to talk about it. One survey found that 25 percent of adults would rather go to the dentist than discuss LTC. Fewer than 30 percent of adults have had a conversation about long-term care planning with an advisor or loved ones. Yet, paying for LTC and the financial cost of long-term care are the greatest financial concerns of Americans over age 40. They worry that if they need LTC the cost will dissipate all their assets and impose a burden on their loved ones.

LTC generates more confusion and misinterpretation than many other topics. Probably because Americans don't like to discuss LTC, when they do consider or discuss LTC and long-term care insurance (LTCI), the discussions tend to be filled with errors.

One survey of Americans 40 and older revealed the depth of the confusion about and discomfort with LTC and LTCI. About half of people said they understand most people are likely to need long-term care sometime after age 65, but believe they won't be among those who need it. Most people say they expect family to provide needed care, though 60 percent say they haven't discussed this with relatives. They also haven't assessed whether any family members are able to perform the tasks needed for in-home care or would have the time.

The cost of long-term care is significantly underestimated by 60 percent of the respondents. Yet, most people significantly ...