Planning for retirement and deciding whether to buy long-term care insurance would be a lot easier if you knew your odds of needing long-term care, as well as at what age and for how long. Unfortunately, there's no definite answer. On the other hand, some statistics do provide a bit of guidance.
In 2012, there were about 1.2 million nursing home residents over 65 years old in the United States. Of these, 18 percent were 65 to 74 years old, 32 percent were between 75 and 84, 41 percent were between 85 and 94, and 9 percent were 95 or older. Of course, there are fewer of us in each age cohort, so the likelihood of needing nursing home care rises even more steeply with age than these percentages indicate. While these numbers do not reflect other types of long-term care, the need for home care, assisted living, or care provided by family members probably rises at similar rates.
According to the American Association for Long-Term Care Insurance, in 2012 64 percent of long-term care claims were made by those over age 80 and only 9 percent were from those in their 60s. Meanwhile, according to the association's figures for 2008, 44 percent nursing home residents stay less than a year, 30 percent stay between one and three years, and only 24 percent spend more than three years in a facility. Updated numbers would likely indicate even shorter stays as more seniors receive care at home or in assisted living facilities. Those who move to nursing homes do so when they are older and sicker, meaning that they stay for a shorter period of time than in the past. According to one reported statistic, only 40 percent of seniors spend any time in a nursing home.
Interpreting the Numbers
So, what do all of these statistics mean in terms of your planning? First, the odds are that you will not need care until you are at least 80 or 85. Second, if you do need nursing home care, there's a 44 percent chance it will last less than a year (either because you will return home after a period of rehabilitation or you will not survive more than a year) and only a one-in-four chance that your stay will last three or more years. Of course, if it does, your costs will become prohibitive. However, since only 40 percent of seniors spend any time in a nursing home and only a quarter of those stay longer than three years, this means that statistically you have only a one in 10 chance of needing more than three years of nursing home care.
Unfortunately, these statistics are somewhat dated and are just statistics. How do any of us know whether we are part of the 60 percent of seniors who will never enter a nursing home, the 30 percent who will spend less than three years there, or the 10 percent who will spend more than three years? We don't, but we can modify the statistics based on our own circumstances, especially with respect to certain factors.
Family History: Did your parents live to a ripe old age with no cognitive impairment or become demented at 72, requiring continuing care for another 10 years? While we do not have our parents' exact genes or live their same lifestyle, there are likely to be some similarities.
Health and Fitness: Do you have any illnesses or conditions that could lead to future impairments or are you in good health and take good care of yourself? Are you overweight or obese, which can lead to illness and disability? Of course, in terms of long-term care, health can cut in both directions. Bad health can lead to the need for care or it can cause an early death, eliminating the need for care. Good physical health can delay the need for care but in the event of cognitive challenges mean that you live a long time with impairments.
Family Situation: If you do need assistance in the future, do you have a spouse, children or other family members who could provide care? Or would you need to pay for it whether at home, in assisted living or in a nursing home?
We have statistics on the need for nursing home care because nursing homes are highly regulated. We know how many people are in them at any one time and how long they stay. We don't know for sure how many seniors are receiving care at home or in assisted living facilities. But let's assume for the sake of argument that for every person living in a nursing home, there's another receiving care at home or in assisted living. Then we can assess the average likelihood of needing care as follows:
No Need for Care
0 - 1 Year
1 - 3 Years
More than 3 Years
Then, you can adjust these numbers up or down based on your health, family history and family situation. For instance, if you are in excellent health, you might add 10 percentage points to the likelihood that you will not need any care, reducing the likelihood of needing 1 to 3 years or more than 3 years of care by 5 percentage points each. If, on the other hand, one of your parents needed a decade of care due to Alzheimer's disease, you might add 5 percentage points each to the longer levels of care, taking 5 percent off of both the “no need” and the “less than one year” categories. Statistically, men are more likely to receive assistance from their wives, than women from their husbands, in large part because women live longer on average.
While this is far from perfect, by developing your own table you will have a better idea of how to protect yourself and your family’s finances should you require long-term care. Your attorney can help with this planning, explaining your options and the steps that can be taken now to prevent financial devastation later.