It’s no secret that women play a vital role in the family dynamic. Although mothers and women are often the ones who help keep everyone safe, happy, and healthy, all too often they end up facing their later years worrying about how they will pay for the cost of long-term care.
According to the American Council of Life Insurers, Long-Term Care Insurance, 70% of people over the age of 65 will need long-term care services1. While family members may be able to provide some of these services, paid care may be needed to supplement family-provided services as care and support needs increase. However, the cost of quality long-term care is expensive. For example, the average cost of a private room in a nursing home in 2019 is $102,200 per year and home care costs are on average about $4,385 per month2.
Medicare will pay for skilled care or in a nursing home or rehabilitation facility for a limited time following a hospital stay, but it will not cover most long-term costs. Medicaid provides long-term coverage only to those with limited income and resources: usually, before a person can qualify for Medicaid, they must “spend down” or exhaust most of their personal financial resources. Additionally, most private health insurance plans do not cover long-term care. Planning for long-term expenses is an important part of retirement planning that is often overlooked. Insurance can help protect retirement assets and allow for more choice in types of care and care settings.
That’s why we want to take the time to explain why long-term care considerations can be especially important for women and their families.
1. Women as Caregivers:
Women are more likely than men to be caregivers to children, spouses, and aging family members. In fact, 75% of those providing family caregiving at home are female3. Providing long-term care for others can have a significant impact on women’s finances since many will have to reduce their hours or leave the workforce altogether to care for family members or loved ones.
2. History of Longevity:
Currently, women who reach the age of 65 can expect to live another 21.5 years to the age of 86.5, about 2.5 years longer than the life expectancy for a man reaching 65. Moreover, one in three 65-year-olds today will live past age 904.
3. Women are Unable to Afford Long- Term Care: Since women tend to enjoy longer lifespans, it can create a situation where they enter their later years without a spouse or partner to care for them the way they’ve provided for others. Since many will have gone from two incomes to one, they might not have the financial resources to afford long term care. In 2018, the median income for women 65 years of age or older was $20,637—barely one-fifth of what it costs to live in a nursing home for one year5.
4. Women Need More Long- Term Care Than Men: At the end of their lives, women can spend twice as many years in a disabled state as men do: 2.8 years if they live past 65 and three years if they live past 80. The reasons listed above are a just a few examples of difficult situations that can be avoided by planning ahead and working with a financial advisor who is experienced in helping clients navigate the complexities of planning, saving, and living in retirement.
- Who Will Pay for Long-Term Care, American Council of Life Insurers, 2015
- Cost of Care Survey, Genworth Financial, Inc., 2019
- Long-Term Care for Women, American Council of Life Insurers, 2018
- Institute for Aging Report, Albert Einstein College of Medicine, 2019
- Long-Term Care for Women, American Council of Life Insurers, 2018
