Baby boomers are at the crest of retirement. Born just after World War II, they are between 55 and 70 years old today. The Insured Retirement Institute's annual study, "Boomer Expectations for Retirement," found that more than half of the baby boomers surveyed think their health care costs will consume up 20% of their retirement income, or even less. But analysts predict a healthy couple in their mid-60s today, might actually need $300K–$500K just to cover the supplementary insurance, copays, prescription drugs, and other out-of-pocket health care expenses that greet the aging. According to the study, less than ten percent of baby boomers have enough saved up.
A PBS report estimated 70% of seniors will eventually require long-term care, yet only half of seniors surveyed anticipate this need. An overwhelming majority (77%) of seniors intend to live at home for the rest of their lives. This may be optimistic, considering the 70% likelihood of needing long-term care services as one ages. And—spoiler alert—Medicare does not pay for most long-term care or personal (custodial) care services. Current figures report payments of private long-term care insurance benefits at nearly $6 billion per year.
It's important to become educated in the living care options that will be available for your future. Recognizing there's a chance of needing long-term care, and planning for those costs, are subjects to discuss with your financial advisors and estate plan attorney. For additional information on services and advanced care planning, check out www.longtermcare.gov.