March 12, 2024

Episode 116: Costs and Prevalence of Long-Term Care Planning (Part 2)

44 minutes

In this episode, Wade and Alex discuss the costs and prevalence of long-term care. They explore the probabilities of needing long-term care and the average lengths of care for men and women. They also differentiate between any long-term care needs and paid long-term care needs. The conversation provides insights into the importance of planning for long-term care and highlights the need for realistic expectations and budgeting. This conversation explores the financial implications of long-term care, including the distinction between unpaid and paid care. It highlights the impact of unpaid care on caregivers' lives and the need for paid care. The discussion also delves into the gender differences in long-term care needs and the higher costs associated with women. The Genworth Cost of Care Study provides insights into the average costs of various long-term care options. The conversation emphasizes the importance of considering inflation and demographic trends when planning for long-term care expenses.

Takeaways

The probability of needing long-term care is higher for women than men, primarily due to their longer life expectancy.

On average, men need long-term care for about 2.5 years, while women need it for about 3.6 years.

About 56% of individuals will likely need to plan for long-term care in their retirement.

Planning for long-term care should consider both the probability and length of care needed, as well as the potential costs involved. Unpaid care can have a significant financial and personal impact on caregivers, often disrupting their own retirement plans.

Women tend to have longer long-term care needs and higher costs due to their longer life expectancy and caregiving roles.

The Genworth Cost of Care Study provides estimates of the average costs of different long-term care options.

Long-term care expenses are likely to grow faster than the overall inflation rate, making it important to plan for higher costs.

Chapters

00:00 Introduction and Personal Updates

05:12 Probabilities and Length of Long-Term Care Needs

10:32 Probability and Length of Any Long-Term Care Event

18:59 Unpaid Care vs. Paid Care

19:37 The Financial Impact of Unpaid Care

20:23 The Cost of Paid Long-Term Care

21:11 Lower Probability of Needing Paid Care for Longer Durations

22:18 Long-Term Care Needs and Gender

23:08 The Impact of Unpaid Care on Women

24:05 Lifetime Expenditures for Long-Term Care

25:18 Inflation and Long-Term Care Expenses

26:35 Triggers for Long-Term Care Needs

28:18 Gender and Long-Term Care Planning

29:01 Genworth Cost of Care Study

31:05 Inflation Rate for Long-Term Care Expenses

32:02 The Progression of Long-Term Care Needs

33:27 State-by-State Differences in Long-Term Care Costs

38:01 Considering Alternative Care Options

39:46 The Growing Need for Long-Term Care

Links

Join the waitlist for the next Retirement Income Challenge by visiting risaprofile.com/podcast

The Retirement Planning Guidebook: 2nd Edition has just been updated for 2024! Visit your preferred book retailer or simply click here to order your copy today: https://www.wadepfau.com/books/

This episode is sponsored by McLean Asset Management. Visit https://www.mcleanam.com/roth/ to download McLean's free eBook, "Is a Roth Conversion Right For You?"

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By Wade Pfau & Alex Murguia

3.9

152152 ratings