The AP report shows the five things you need to understand about aging in America. The financial costs and burdens of aging will impact you, your family, your savings and your lifestyle.
Americans don't like talking about getting older or needing help as we age. But the fact is as we get older, we often need help doing simple chores that seemed easy before. Things like cooking, bathing, taking medicine or paying bills. This type of help is often referred to as long-term care. Here's what you need to know.
1 - A Lot of People Will Need Long-Term Care
The older population in America is growing at an unprecedented rate. In 2014, there were 46 million people aged 65 and older. By 2060, there will be about 98 million, more than double the number in 2014, and the majority of these people will need longterm care as they age. 7 in 10 will need at least some help, while 5 in 10 will need extensive services. Yet many families aren't prepared. In fact, one in three older Americans say they have done no planning for their longterm care needs.
2 - Family Members Do Most of the Caretaking
Very few people actually receive long-term care in nursing homes. The majority of long-term care is provided at home by friends and family. Two-thirds of the Medicare population rely exclusively on long-term care from unpaid family members. These unpaid caregivers face high costs for providing care, including lost income and increased stress.
3 - Paying for Long-Term Care Is Very Expensive
Long-term care comes with high costs, not just for those who need care, but for the families who support them. On average, an assisted living facility is $3,600 per month, a home health aide is $3,900 per month and a nursing home room is $6,800 per month.
4 - Medicare Doesn't Cover the Costs of Long-Term Care
There's a lot of confusion about who pays for this care. Many people think Medicare will cover them, but Medicare only covers short term rehab after a hospital stay. Medicaid does pay for long-term care, but only after exhausting most of your personal assets, and social security is rarely enough to cover the full cost. The average monthly social security check was only $1,348 in 2016. A home health aid costs nearly three times that amount, and a nursing home is five times as much.
5 - The Financial Burden of Long-Term Care Effects Everyone
As the population ages, long-term care costs will continue to grow, amounting to a looming crisis for the United States. In 2013 alone, Medicaid spent $146 billion on long-term care. Family and friends provided an estimated 37 billion hours of unpaid care, worth up to $470 billion.
So what can you do? The earlier your family starts planning for long term care, the better prepared you'll be. Talk to your loved ones about the help they may need. Make a list of people who might support you as you age, and share your preferences with them. Review your finances, and begin preparing for the costs of care.