New analysis shows Americans 60+ are aging without a long-term care safety net
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Key takeaways
— An updated analysis by the National Council on Aging and LeadingAge LTSS Center @ UMass Boston shows a little over 27 million households with adults age 60+ cannot afford basic living needs.
— Researchers say 60% of older adults would be unable to afford two years of in-home long-term services and supports.
— While older adults’ income increased modestly from 2018-2020, 60% experienced a decrease in assets.
An updated analysis by theNational Council on Aging (NCOA)and LeadingAge LTSS Center @ UMass Bostonfinds that 80% of Americans 60 and older continue to have very few resources to pay for long-term care or weather financial emergencies. While older adults’ incomes and the net value of their homes increased slightly from 2018-2020, the value of their financial assets and total wealth decreased.
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“This is a snowballing crisis,” saidRamsey Alwin, NCOA President and CEO. “At the same time that 11,000 people are turning 65 every day for the next several years, a growing number of older adults are facing financial stress now and will not be able to afford the care they will need in the future. Congress needs to hear this alarm bell and support programs that help all Americans age with health and dignity in their communities.”
Increases in Older Americans’ Income and Household Assets Still Cannot Support Most During Financial Hardshipcompares the income, housing value, retirement, and other savings of people 60 and older with the cost of paying for long-term care and with the Elder Index, an online tool that shows how much money older adults need to live independently.
Key findings:
— The bottom 20% of Americans 60 and older (15 million households) have no assets. In fact, some are in debt. This group had a median income of $18,000 in 2020 and is facing economic insecurity. Almost 90% of them had household incomes below the Elder Index level.
— About half (49.6%) of those 60 and older (a little over 27 million households) have an average income below what they need to cover their basic needs, as calculated by the Elder Index.
— Despite older adults’ preference to age in place, 60% are unable to afford two years of in-home long-term services and supports (LTSS).
“These findings certainly show that despite gains in income, many millions of older adults continue to live on the edge,” said Dr. Marc Cohen, co-author of the report and Co-Director of the LeadingAge LTSS Center at UMass Boston. “This reality highlights just how important it is to make sure that our social safety net programs are preserved and strengthened.”
LTSS is one of the most significant costs for older adults. It ranges from assistance with activities such as bathing and dressing to medical care in a skilled nursing facility. While many Americans underestimate the need for LTSS, over half of adults 65 and older will need these services for less than two years, and about one in seven will require care for more than five years. In 2023, the median yearly cost of a home health care aide was $75,504 and a private room in a nursing home was $116,800.
The COVID pandemic added additional pressures to employment, income, and savings. During the pandemic,11% of people 65 and older lost their jobs. With an increase in fatalities due to COVID or related complications, widowhood was a likely source of financial shock for many. All these factors put additional pressures on already significant and persistent long-term care costs.
Medicare does not pay forLTSS, so older adults and their families bear this financial risk directly. Medicaid covers nursing homes, but only after older adults spend down their assets to less than $2,000.
According toJAMA Network, over a 20-year period, more than 25% of adults 50+ will experience a shock resulting in a 75% or more drop in net wealth. Among adults 70 and older, more than two-thirds will experience at least one negative shock with financial consequences over a nine-year period.
Americans want a solution.NCOA’s recent What Women Say™ survey of women age 25+ found that 94% of respondents across party and demographic lines support improving Medicare and Medicaid to better ensure that older adults have the option to receive care at home rather than having to go into a nursing home. In addition, 96% of respondents support a tax break for family caregivers to help cover their out-of-pocket costs, and 92% support creating a new government program to pay for some long-term care costs.
Researchers atNCOA and the LeadingAge LTSS Center @UMass Boston analyzed data from the 2020 Health and Retirement Study, a longitudinal panel study that surveys a representative sample of approximately 20,000 people in America, supported by the National Institute on Aging and Social Security Administration.
AboutNCOAThe National Council on Aging (NCOA) is the national voice for every person’s right to age well. We believe that how we age should not be determined by gender, color, sexuality, income, or ZIP code. Working with thousands of national and local partners, we provide resources, tools, best practices, and advocacy to ensure every person can age with health and financial security. Founded in 1950, we are the oldest national organization focused on older adults. Learn more at www.ncoa.org and @NCOAging.
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SOURCE National Council on Aging
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