Survey: Over half are willing to take a loan from
their retirement account to pay for caregiving expenses
COLUMBUS, Ohio, May 21, 2024
/PRNewswire/ -- As America's population ages, and long-term care
costs continue to rise amid sticky inflation, some Americans are
paying a sharp financial price to provide and pay for long-term
care for themselves and their loved ones, according to the annual
Nationwide Retirement Institute® Long-Term Care survey, released
today.
This survey of 1,334 U.S. adults aged 28 or older with
household incomes $75,000 or higher
found that many are in the difficult position of balancing
caregiving and their long-term financial wellbeing, often leading
them to make significant financial sacrifices.
Among the key findings:
- When considering how they will afford to provide care for loved
ones, over half (56%) said they are willing to take a loan from
their retirement account to be a caregiver for someone in their
family, straining their long-term finances
- Nearly half (42%) believe being a caregiver will likely use up
the money they had planned for their children
- Caregivers have substantial out-of-pocket non-reimbursed
expenses associated with caregiving, such as co-pays, prescription
drugs, gas money, transportation, and more. On average, these
individuals spend $338 per month on
caregiving expenses
- Nearly half (43%) are afraid that caregiving expenses will keep
them from ever retiring
- Fifteen percent of Americans had to transition to part-time
work to be a caregiver or take a lower paying job that is more
flexible in order to be a caregiver
While it is clear that the caregiving role can place a
significant financial strain on individuals and families, only 17%
of adults say they have discussed long-term care planning with
their financial professional. Of those who have a financial
professional but have not talked with them about long-term care
costs, 30% report that their financial professional has not brought
it up as a planning topic.
"Long-term care planning is complicated and emotional, and has a
huge impact on financial wellbeing," said Holly Snyder, president of Nationwide's Life
Insurance business. "Our data shows that Americans would benefit
from taking a more proactive approach to financial planning to
ensure they are equipped to meet the needs of their loved ones and
themselves as they age. The most important step financial
professionals can take is to proactively communicate with their
clients, ensure they understand the costs, and develop a long-term
care plan that accounts for their own long-term care needs as well
as those of their loved ones."
Many Americans have misconceptions about the cost of
long-term care insurance
Unfortunately, many Americans are underutilizing the safeguards
in place to help manage long-term care costs, such as long-term
care insurance. In fact, just one in five said that they have
purchased long-term care insurance. Of those who have not purchased
the insurance, nearly half (49%) cited cost as a reason for not
prioritizing it.
All too often, people overestimate the cost of long-term care
insurance. When presented with a description of a sample long-term
care insurance policy, 20% guessed it was $500+ per month, nearly
four times the actual cost of $130
per month. After they were told that the policy cost $130 per month, 40% said they were willing to
consider purchasing a similar one for themselves.
"Because most people assume long-term care insurance isn't
affordable, they don't purchase a policy, which can leave them
saddled with hefty long-term care costs later in life," Snyder
added. "It is great to see that so many said they would consider
purchasing a policy after seeing an estimate. This misperception is
a costly mistake that can easily be avoided with the right
insurance partner and a proactive financial professional."
Future long-term care is looking bright with the help of
AI
Although long-term care costs and caregiver expenses are a
financial burden for many of these Americans, advancements in AI,
AI helper tools, or robots could change the way people receive
their long-term care and reduce the financial strains placed on
caregiving and aging.
While almost one third (32%) do not believe they will be able to
afford to receive long-term care in their home, over half (54%)
expect that AI and robotics will be affordable for people like them
to help with aspects of daily living later in life.
Americans anticipate AI to assist in more ways than only easing
financial strain. Over one third (37%) believe AI will provide
their in-home long-term care, relieving stress from family and
loved ones. Additionally, more than half of Americans (53%) expect
AI will make their job easier – either by alerting them if the
person they are caring for suffers a medical emergency (47%) or
helping them manage their medication and appointments (36%).
In fact, one in three Americans (33%) expect AI to extend their
life an average of 6 years. And a third of caregivers (36%) expect
AI to extend the life of the person they provide care an average of
7 years.
To encourage discussions around long-term care costs in
retirement, Nationwide's Health Care/LTC Cost Assessment tool uses
proprietary health risk analysis and updated actuarial cost data to
provide a meaningful, personalized cost estimate to help financial
professionals and clients plan for future medical and long-term
care expenses.
To learn more about the 2024 Nationwide Retirement Institute
Long-term Care survey, visit www.nationwide.com/ltcinsights.
Financial professionals can learn more at
www.nationwidefinancial.com/ltcinsights.
Methodology
The research was conducted online in the United States by The Harris Poll on behalf
of Nationwide among 1,334 adults ages 28+ with household income of
$75K+. The survey was conducted March
12 – April 2, 2024.
Data are weighted where necessary by age by gender,
race/ethnicity, region, education, marital status, household size,
household income, and political party affiliation to bring them in
line with their actual proportions in the population. Respondents
for this survey were selected from among those who have agreed to
participate in our surveys.
The sampling precision of Harris online polls is measured by
using a Bayesian credible interval. For this study, the sample data
is accurate to within +/- 3.8 percentage points using a 95%
confidence level. This credible interval will be wider among
subsets of the surveyed population of interest.
All sample surveys and polls, whether or not they use
probability sampling, are subject to other multiple sources of
error which are most often not possible to quantify or estimate,
including, but not limited to coverage error, error associated with
nonresponse, error associated with question wording and response
options, and post-survey weighting and adjustments.
About The Harris Poll
The Harris Poll is one of the longest running surveys in the
U.S. tracking public opinion, motivations and social sentiment
since 1963 and is now part of Harris Insights & Analytics, a
global consulting and market research firm that delivers social
intelligence for transformational times. We work with clients in
three primary areas; building twenty-first-century corporate
reputation, crafting brand strategy and performance tracking, and
earning organic media through public relations research. Our
mission is to provide insights and advisory to help leaders make
the best decisions possible. To learn more, please
visit www.theharrispoll.com.
About Nationwide
Nationwide, a Fortune 100 company
based in Columbus, Ohio, is one of
the largest and strongest diversified financial services and
insurance organizations in the United
States. Nationwide is rated A+ by Standard & Poor's. An
industry leader in driving customer-focused innovation, Nationwide
provides a full range of insurance and financial services products
including auto, business, homeowners, farm and life insurance;
public and private sector retirement plans, annuities and mutual
funds; excess & surplus, specialty and surety; and pet,
motorcycle and boat insurance.
For more information, visit www.nationwide.com.
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This material is not a recommendation to buy or sell a financial
product or to adopt an investment strategy. Investors should
discuss their specific situation with their financial
professional.
This information is general in nature and is not intended to be
tax, legal, accounting or other professional advice. The
information provided is based on current laws, which are subject to
change at any time, and has not been endorsed by any government
agency.
Nationwide Investment Services Corporation (NISC), member FINRA,
Columbus, OH. Nationwide
Retirement Institute is a division of NISC.
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Institute are service marks of Nationwide Mutual Insurance Company
© Nationwide 2024
NFM-23932AO
Contact:
Charley
Gillespie
(614) 249-6349
charley.gillespie@nationwide.com
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