Most baby boomers are going to be in for a big shock when they transition from working to retirement. They haven’t planned properly for it and, as a result, many are likely to run out of money and to be living somewhere they don’t want to live, until they die.
These and other grim conclusions are among the “highlights” (or lowlights) of “Retirement Care Planning: The Middle-Income Boomer Perspective,” a study by Bankers Life and Casualty Company’s Center for a Secure Retirement.
“Baby boomers … expect to experience retirement differently than previous generations of retirees,” the study’s introduction intones.
If the research findings are correct, they certainly will experience it differently — painfully so.
The nationwide survey obtained input from 1,299 people ages 49 to 67. Annual household income was between $25,000 and $75,000. Some 505 respondents self-identified as caregivers.
Here’s the nitty-gritty of planning for long-term care:
- 72 percent of middle-income boomers have no plan for their retirement care. Only one in five have a rough plan for how they will receive the care they may need in retirement; just 8 percent have a detailed plan;
- 43 percent of all middle-income boomers have not had a discussion with anyone about how they wish to receive long-term care;
- 56 percent have not had a discussion with anyone about how they will pay for long term care;
- Middle-income boomers significantly underestimate the likelihood of one day needing long-term care. Only 36 percent believe they will need long-term care services, whereas the actual chance of needing care is 70 percent, according to the U.S. Department of Health and Human Services;
- Eight in 10 middle-income boomers could not venture a guess on the average cost for home-health aide services or nursing home care.
More discouraging detail on paying for retirement and long term care:
- Boomers significantly underestimate the annual cost of nursing home care by estimating that a year’s stay averages $46,890 when the actual average cost is nearly double, at $90,520;
- More than three-quarters (78 percent) of middle-income boomers either incorrectly think Medicare will pay for ongoing long-term care or simply do not know how they will fund their care;
- Nine in ten (88 percent) middle-income boomers do not own long-term care insurance as a means to help pay for their retirement care, with one-third (34 percent) being unfamiliar with it altogether.