As financial stress from market uncertainty takes a toll on Americans, a new analysis shows how unprepared many are for a financial emergency, finds new research from the National Council on Aging (NCOA) and the LeadingAge LTSS Center @ UMass Boston.
The survey found that 80% of Americans aged 60 and older cannot sustain a financial shock such as needing to pay for long-term care services and supports (LTSS), or the loss of income due to divorce or widowhood.
“It is unacceptable that nearly all older Americans are one crisis away from plunging into poverty after working their entire lives and often saving a nest egg that is then wiped out by the cost of care,” said Dr. Susan Silberman, NCOA senior director, research and evaluation, in a statement. “This is a snowballing crisis given that the older population is growing rapidly. The cost of care is staggering, and older adults’ resources are insufficient.”
According to the NCOA, 20% of older households have no assets to draw upon to withstand a financial shock. Previous research from the organization found that over half of adults aged 65 and older will need LTSS for less than two years, and about one in seven will require care for more than five years. In 2021, the median yearly cost of a private room in a nursing home was $108,405, and that of a home health care aide was $61,776.
The findings come as more U.S. workers report feeling stressed and anxious about their healthcare costs, with many listing it as a top concern in 2023. As a result, a recent Fidelity survey found more workers are either opting in or asking their employers for health savings accounts (HSAs), in an effort to reduce costs in retirement.
“Meeting the rising cost of health care continues to be a concern for Americans, particularly as inflation impacts household budgets,” said Begonya Klumb, head of health and benefit accounts at Fidelity, in a statement at the time. “We see time and again that savers with access to an HSA are able to use the triple-tax advantage to become better prepared for the cost of health care, both today and in the future.”
SEE ALSO:
- Americans Are Increasingly Worried Over Healthcare Costs
- Healthcare and Living Costs Among Top Concerns for Retirement Savers: Smart
- Just How Much a Retiree Will Spend on Healthcare: Milliman
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.
