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Benefits November 17, 2004
Older Workers Don't Understand Costs of Long-Term Care
November 17, 2004 (PLANSPONSOR.com) - Workers ages
50 an older don't really understand the costs of long-term
health care, and they usually underestimate how long they
will live, according to a new study.
Reported by Kip McDaniel
Men are more confident that they could pay for long-term care, according to a report from MetLife and AARP. Men are more likely to assert that they could pay for at least one year of such care, at a cost of $66,000, by using savings, investments, assets, or long-term insurance. Thirty percent of both men and women think that they can pay the largest share of these costs with sources that are not designed to cover these expenses such as Medicare and insurance.
Ownership of long-term care is far from the norm for those over 50, with only 16% of men and 14% of women claiming ownership of such care.
The survey, conducted by Mathew Greenwald & Associates, Inc., also shows that pre-retirees are also underestimating the number of years that they will likely live. Only 37% understood the concept of life expectancy, according to the survey, and few estimated correctly how many centenarians existed in the US, with a vast majority underestimating the number.
The survey also showed that retirees were not properly assessing their retirement financial needs. Only 27% understood that experts recommend withdrawing 4% annually from retirement savings in order to have enough money. Only 39% understood how expensive a long-term care room would actually cost – an average of $61,000 a year – with well over half not understanding how much is spent on health care in general in retirement.
The survey derives from a demographically balanced sample of 1,000 internet study panelists ages 50 or older, in conjunction with the AARP and MetLife. For a complete report, please see www.maturemarketinstitute.com .