40% of Wealthy Unprepared for Costs of Home Care
Despite the overwhelming preference among older Americans to age in place, new research shows that even the wealthy aren’t prepared for the costs of home health care.
In fact, nearly 40% of the affluent cohort have not financially prepared for these costs, according to the 2015 U.S. Trust “Insights on Wealth and Worth” survey, which polled 640 individuals with at least $3 million in investable assets.
Not surprisingly, more than half of the survey respondents expect to age in place with care provided either by family (22%) or private home health care providers (32%) in the event that long-term care is ever needed.
Previous research has shown that informal care alone — that provided by friends and family — costs Americans $522 billion annually. The annual median cost of a home health aide, however, was about $45,000 in 2014, according to data from long-term care insurance company Genworth.
On the other hand, nearly one-quarter (23%) of U.S. Trust respondents expect to live in a luxury assisted living facility.
For assisted living as a whole, the average monthly rent was $3,823 in 2014, putting the average annual cost at nearly $46,000, according to A Place for Mom, the nation’s largest senior care referral service. However, those costs would likely increase depending on the luxury assisted living facility chosen.
Whether survey respondents favor luxury assisted living or home health care, many are still not prepared to pay the price tag for either.
In a breakdown of the data, 56% of respondents are financially prepared for the costs of in-home care, while the same percentage is prepared for the costs of luxury assisted living. Still, nearly four in 10 are not, U.S. Trust reports.
Other respondents indicated if long-term care is needed, they would move from their current home to be close to family members (8%), move in with children or other family members (2%) or have children or other family members move from their home to be close to them (2%).
Access the survey findings here.
Written by Emily Study