A significant number of aging adults in America are facing a critical challenge that is now well past the boundaries of age and socioeconomic backgrounds. A recent study conducted by the National Council on Aging (NCOA) and the Leading Age LTSS Center at the University of Massachusetts Boston reveals that at least 80% of aging adults lack the financial means to cover around two years of nursing home care or four years of assisted living.
As the desire to “age in place” grows, it is even more concerning to note that 60% of older adults, or another way to look at it…24 million households, lack the funds required for in-home long-term care. This is just another hurdle for seniors that need assisted living services. These findings outline the importance of addressing financial security in the later stages of life and exploring potential solutions to bridge this continuously widening gap.
Right now, it’s looking like aging in place is becoming impossible, nursing home stays are becoming unattainable, and assisted living is just as out of reach. With these issues rising, what do seniors need to know and what can they do?
The Reality of Financial Insecurity and Assisted Living
Financial insecurity among aging adults is not uncommon especially in an economy that is constantly shifting downward. The assumption that older adults are generally asset-rich has been challenged at this point and it’s being noticed that more seniors are working in their later years not because they want to but because they have to. Dr. Jane Tavares, a lead researcher at the LTSS Center, emphasized that this misconception does not hold true across the board in terms of seniors being asset-rich.
We have to also realize the ongoing impact of the COVID-19 pandemic and how it’s expected to exacerbate these issues for seniors, which will only further highlight the need for more urgent action.
The Rising Costs of Assisted Living
Assisted living costs have steadily risen over the years, posing a significant financial burden on seniors and their families. The 2021 Cost of Care Survey from Genworth discloses an average monthly cost of approximately $4,500 for assisted living. However, the expenses vary based on location and required care level. Dr. Steven Norris, a senior health and care expert, explains that this trend is likely to continue as demand for these services grows and qualified caretakers become increasingly scarce.
For Florida seniors, this can be far out of reach and almost seem impossible to make work especially for those that are on a fixed income. Factors such as minimum wage increases and overtime payment legislation changes have also contributed to the mounting costs of assisted living, which has only strained financial resources more.
The Changing Retirement Model and Its Impact
The changing landscape of retirement is another contributing factor to the financial struggles faced by seniors and the aging adult population in general. Traditional employer-sponsored pensions have given way to individual 401(K) accounts, leaving retirees solely responsible for securing their financial future.
This shift has resulted in inadequate savings for many older adults. This financial crisis also leaves very little room for significant savings or investments, making it challenging for older adults to afford long-term care insurance that could help mitigate the costs of assisted living or nursing home care.
While the financial challenges facing aging adults may appear daunting, especially when seeking assisted living services there are potential solutions that can offer relief. Despite over 2,500 state and federal benefit programs designed to enhance the economic security of older adults, many remain underutilized and that’s because a lot of seniors aren’t aware of them or how they help.
Education plays a crucial role in improving seniors’ financial stability, as individuals need to understand retirement savings strategies and the importance of Social Security planning. Additionally, tapping into home equity and exploring combined public-private initiatives could offer practical solutions to the long-term care coverage dilemma.
Prepare for Aging Like You Would for Anything Else
As we face an aging population, it is essential to address the growing financial insecurity among seniors. The time to prepare for your later years is as soon as you think to do so. The findings from the NCOA and LTSS Center’s study are prompting society, policymakers, and individuals to collectively work towards securing a more financially stable future for our seniors.
Through awareness, education, and innovative solutions, we can potentially bridge the gap between the desire to age in peace and at least some relaxation and the financial realities that come with it. The time to prioritize the well-being of our aging population and ensure that their golden years are exactly that are now. In terms of health and financial security, there aren’t enough seniors that know how to navigate it but there are more than enough resources to solve their everyday concerns. It just has to be made known.