While 56% of Americans say that saving for long-term care (LTC) is one of their top financial priorities, 73% have not planned for their LTC needs, Northwestern Mutual learned in a survey. While the focus on LTC needs followed that of saving for retirement (68%), it surpassed paying off debt (56%) and saving for a home (33%).
Among the 26% who have taken steps to plan for their long-term care, 52% included provisions in their financial plan, 42% purchased an LTC product and 35% increased their savings.
Forty-seven percent of Americans expect their spouse or partner to help them with their LTC needs, and 26% expect their children to assume the role. Nonetheless, 69% have not discussed this with their family.
“According to our data, Gen X and even Millennials are the heart of the sandwich generation and struggling with the competing pressures of caring for aging family members and their own children, while building financial security and maintaining a lifestyle,” says Kamilah Williams-Kemp, vice president, long-term care at Northwestern Mutual. “To break this cycle, it’s imperative to have candid conversations with family members about your expectations and work together to develop a realistic strategy for your future that will serve everyone’s best interests.”
The study also learned that while 53% of respondents said they planned to become caregivers, many are unprepared for the financial implications of taking on such a role. Although 57% of people who expect to become caregivers realize they will incur costs, 48% have not made any plans to cover these costs.
While 48% said they were not equipped to provide financial support, 68% actually provided it. More than one-third, 34%, spend between 21% and 100% of their monthly budget on caregiving-related expenses. Among those expenses, $273 is spent on average on medicine and medical supplies, and $159 on food. To cover these expenses, 67% of caregivers reduced their own living expenses.
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