An alarming rate of Americans underestimate the need for long-term care funds while saving for retirement, according to the results of two independent surveys.
Both Transamerica’s Extended Care Report and research by the Lincoln Financial Group noted that although Americans might recognize the need to incorporate long-term care into their savings plans, a disconnect exists between preparing for and executing those plans.
Surveying 1,700 individuals, Transmerica found that 91% of its survey participants recognize the importance of incorporating long-term care into their retirement strategies. Ninety-six percent of those asked recognized the importance of planning for long-term care, but only 19% actually have started planning for a possible need.
“With nearly all respondents acknowledging the importance of planning for long-term care, it’s clear that awareness is not the issue. The challenge lies in translating this awareness into action,” John Stanley, senior managing director for employee benefits at Transamerica, said in a press release.
Forty-five percent of respondents to the Transmerica survey said they were unsure how they would pay for long-term care. Eighty percent of respondents without insurance indicated that they would use personal funds, retirement accounts, pensions and reverse mortgages to cover their long-term care needs.
A separate survey by the Lincoln Financial Group found differences in what consumers and financial professionals perceive to be the biggest threat to retirement savings.
Almost 60% of consumers asked said they believe that inflation is the biggest threat to their retirement savings, whereas just more than half said they look to the economy as a possible culprit.
“With a record-setting wave of Americans reaching retirement age next year, the time is now — more than ever — for consumers to factor long-term care into their retirement plans,” said Mike Hamilton, a vice president at Lincoln Financial Group.
