I just read a great article in the Journal of Financial Planning about the “Double Jeopardy” women face with long-term care. Written by Mary Quist-Newins with American College, she succinctly describes the increased risks women face as both caregivers and receivers in planning for long-term care.
According to Quist-Newins, the first risk is caregiving. She writes:
For many women, the first exposure to LTC occurs when they provide services or financial support to a loved one. Women are the vast majority of professional or formal caregivers; they’re also the primary deliverers of informal home care. Approximately 75% of those providing home care are female, most often daughters. Women also spend 50% more time giving care than men.
While the high cost of facility care is common knowledge, the costs and consequences associated with giving care in the home are less well known. Consider these stark realities:
- Nationally, more than 6.4 million working women provide direct or indirect caregiving assistance. By 2010, 10.1 million employed women will bear this burden. As boomers age, these numbers could double by 2050.
- According to research from the National Center on Women and Aging, family caregivers lose an average of $659,130 over a lifetime in reduced salary and retirement benefits.
- Forty-four percent of female caregivers report high levels of physical strain or emotional stress, while employed caregivers are more than twice as likely to develop depression.
- Women who become caregivers are nearly three times more likely to end up in poverty and five times more likely to depend exclusively on Social Security.
The second risk is care receiving. In this area, Quist-Newins notes that women’s average consumption of nursing care is 3.7 years vs. 2.2 years for men. “As a result, the average American woman is likely to incur more than double the LTC expense of the average male.”
The last risk Quist-Newins writes about is denial. She cites studies showing that only 18% of women have talked with their spouse about long-term care and only 35% have considered how they will pay for long-term care.
In my practice, long-term care is a frequent topics with my clients 50+. One of the biggest reasons people put off structuring a long-term care plan is competing financial priorities. Because a need for long-term care is not definite and planning for it can involve purchasing costly insurance, it often gets bumped to the bottom of the priority list. And from an immediate financial perspective, that’s sometimes the right decision. This article serves as a good reminder. Even if buying the insurance today doesn’t make sense, creating a plan today that financially prepares us to implement a long-term care plan in the future is a must — especially for women.