Major Cost Confusion Hampers Retirement Saving

401k, long-term care, retirement, Genworth

Is he frozen in place?

They’re afraid, not doing anything about it and not planning to do anything about it.

That’s the (depressing) finding from Genworth, who reports “not having enough money to pay for care is the greatest fear adults have about aging and long-term care needs, with only one in five actually taking any action toward financing.”

Furthermore, only half of the respondents said they plan to take personal financial responsibility for their own care as they age, with others saying they would leave that worry to the government, their children or family, community or faith-based organizations, or “had no idea who would provide their care.”

“As these findings suggest, many people will not be prepared financially to handle the impact of growing older, which means the burden of caring for them will fall on their families, friends and communities,” David O’Leary, president and CEO of Genworth’s U.S. Life Insurance division, said in a stated. “That’s why it’s so important for people to talk to their families about who will care for them, educate themselves about the cost of care and develop a plan for how they will pay for it.”

Consumers’ inaction may be partially explained by additional survey findings that showed glaring misunderstandings about what care costs and what costs are covered by various funding sources, including government programs, O’Leary said.

Generational Differences

“People are never too young to begin preparing for how to pay for long-term care costs, which are often overlooked as a major retirement expense and can quickly wipe out a person’s savings,” O’Leary said. “Understanding the costs is a good first step, followed by a conversation with a financial professional about potential funding options that will protect assets against long-term care costs—and provide the peace of mind that comes with knowing you’ll be able to receive the care you need how and where you wish to receive it.”

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