A Woman's Guide to Long-Term Care

Women face unique financial challenges as they age. When compared with men, women live longer, earn less, and spend fewer years in the workforce. Financial concerns are often more acute for older women who are divorced, widowed, or otherwise single, as well as for those who have spent all or a significant portion of their adult years caring for children and other family members. Consequently, planning for long-term care (LTC) is an issue of particular importance.


LTC assists people, through various support services, with activities of daily living, such as dressing, bathing, eating, transferring, and toileting. If a woman has difficulty performing two or more of these activities due to physical limitations, cognitive impairment, or both, LTC may be needed. LTC services are provided in the community, in an assisted living facility, or in a nursing home.


Most people are unaware of the actual costs associated with LTC. For example, according to the American Association of Retired Persons (AARP, 2009), the average cost of a nursing home is $75,192 per year, and the average cost for assisted living is $2,958 per month. It is important to note that these figures are national averages. Actual costs vary widely from state to state. If the cost of living is high in an area, it is likely that costs for long-term care services will be well above the national average.


There are a number of reasons why it is important for women to plan for LTC.

Fact: Women Live Longer.

First, women generally will live longer than men. Back in 1900, women and men shared a similar life expectancy of about 47 years. Today, the longevity of both men and women has increased overall by 20 years, with the life expectancy for women generally five years longer than men. The U.S. Census Bureau (2009) reports that women represent 57% of those aged 65 and older, and 67% of those aged 85 and older. Unfortunately, with a longer life comes an increased risk of health problems. In fact, the Administration on Aging (AoA, 2009) reports that women are twice as likely as men to live in a nursing home. They are also more likely to sustain a disability or be diagnosed with a chronic heal condition.


Women Are Expected to Save More Money

Second, women often lack the resources necessary to fund the care needed later in life. According to the U.S. Department of Labor (DOL, 2009), the average woman in the U.S. who is employed full-time earns less than her male counterpart (80 cents for every dollar a man earned in 2007). In addition, women typically spend nearly 12 years out of the workforce while taking care of children or even their own parents. It is not uncommon for many women to spend their other years raising their family, being a professional, and living their personal life. As a result, their income is disrupted, hindering their ability to save money for LTC.


Shorter Careers, Lower Social Security Benefits

The every-day stress women face will, in turn, lower their incomes; this loss of income will result in lower Social Security benefits. According to the Social Security Administration (SSA, 2009), the average annual Social Security income received by women 65 years and older was just $10,658 in 2007. Moreover, married women often don't know that the benefits accrues by their husbands may be reduced if they are widowed or divorced. These factors put many women at high risk as they age, especially if they do not plan accordingly.


When the need for LTC arises, it may be difficult to assume your children or other relatives can be there for you. But even in the willingness, the cost associated with caregiving often exceeds the financial capabilities of the average family. And, if medical care is required, family members may not have the necessary skills to provide beneficial care. Have you started to prepare for your LTC?


The Insurance Alternative

The good news is there is an alternative. LTC insurance can help cover LTC expenses before you meet the strict requirements for Medicaid eligibility. Many policies cover the costs of nursing homes, assisted living/residential care facilities, adult day-care centers, and/or home care. The cost is typically based on your age, your current health, and specific policy features, such as scope of coverage, levels of care, and duration of benefits. LTC insurance is designed to help you maintain your independence and quality of life while offering increased options for care.


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Affinity Wealth LLC is a Registered Investment Advisor and provides financial-planning services. Affinity Insurance Strategies LLC is a licensed Insurance Agency and works closely with Affinity Wealth LLC to provide services to our clients. Affinity Wealth LLC does not directly offer legal advice.

Scott Lowe is a licensed Mortgage Loan Originator, NMLS #1972148, and is an independent contractor through Pioneer Financial Services