It's no shocker that people want to retire easily, but what surprise is just how few Americans believe they can actually achieve a comfortable post-work life.
According to poll results released Thursday, only 23 percent of retirees today say they will be able to maintain a nice lifestyle throughout their retirement years. One area where there's particular uncertainty is their long-term care - an expense just a small group of retirees think they'll be able to cover.
What is the data that says it all?
The data, published by the Transamerica Center for Retirement Studies, shows that 14% of retirees say they'll be able to afford long-term care if they need it.
The services a person needs in long-term care are a wide-ranging and tailored to each individual's needs. Many retirees end up paying for assisted living, skilled nursing, and/or a room in a nursing home with their savings because they are at the peak of their health problems.
According to the Department of Health and Human Services, 70% of retirement-age Americans will need ongoing care at some point, and many retirees and pre-retirement workers fear a decline in their health that will necessitate long-term care. About 28% of pre-retirement workers, or 35% of retirees, are worried about the costs of long-term care.
These concerns compound other financial worries shared by retirees and older workers. The survey shows that almost half of older workers and one-third of retirees fear outliving their savings entirely, and about 4 in 10 worry that Social Security will not be able to bridge that gap.
The cost of care can be expensive, for example, for the average private room at a nursing home at $9,000 per month, according to one estimate.
To cover these expenses, long-term care insurance is available, and there are a variety of long-term care insurance companies available to choose from. But the premiums are typically high and often increase over time, putting it out of reach for many aging workers. On top of that, many Americans lack the scope of long-term care insurance, and many may not even consider it as an option.
If their health declines, a large group of people are trying to rely on loved ones for help. Of those surveyed, 46% plan to receive their care from family and friends instead of long-term care specialists. Of the remaining retirees, 31% said they have no plan at all for long-term care.
Jill Cornfield, 63, has covered retirement for more than 10 years. My consent for the processing of my personal information is conditioned by Money's Terms of Use and Privacy Notice.
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All information provided is accurate as of the published date.