Who Will Have Unmet Long-Term Care Needs?

Dec 14, 2021 / By Elaine Floyd, CFP®

The Center for Retirement Research at Boston College just completed a three-part series on the needs and resources available for long-term care.

The first study examined the odds of a 65-year-old developing minimal, moderate, and severe needs, considering both the intensity and duration of the required care. The results show that roughly one-fifth of 65-year-olds never require long-term care and about one-quarter will have severe needs, with the rest falling somewhere in between.

The second study estimated the share of retirees who have the resources—either informal care from family or financial means—to cover any potential minimal, moderate, or severe care needs. The results determined that more than one-third of retirees will not have the resources for even the most minimal level of care, while one-fifth can afford care for severe needs if necessary.

The final study combines the findings from the two earlier analyses to determine the share of individuals projected to have inadequate resources for their specific care needs. Overall, the results show that about 60% of those with moderate or severe needs will not have the family or financial resources to meet those needs. Fortunately, Medicaid—a joint federal-state program—offers some support for these individuals (see Figure 2). Without Medicaid, 16% of 65-year-olds will have severe care needs that they will not be able to fully cover using private resources. After accounting for Medicaid (for both those who qualify directly and those who spend down), this share declines to 11%. Similarly, 21% of 65-year-olds will have moderate care needs that they cannot fully afford; however, Medicaid reduces this share to 14%.

As director of retirement and life planning for Horsesmouth, Elaine Floyd helps advisors better serve their clients by understanding the practical and technical aspects of retirement income planning. A former wirehouse broker, she earned her CFP designation in 1986.


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