The lifetime cost of paid long-term care for those aged 70 or more years collectively could swell to $5.6 trillion by the year 2047, according to a study released Thursday by professional services firm pricewaterhouseCoopers.
“If population demographics remain similar to what they are today, long-term care funding for these government programs will be increasingly costly to future generations,” according to PwC. “In the discussion of potential public financing schemes, the results of this study may be useful to policymakers as they try to determine the appropriate amounts for public versus private financing.”
The “Formal Cost of Long-term Care Services” report estimated the current average lifetime cost of long-term care as $172,000 (in 2016 dollars) per person, based on a study of long-term care insurance claims. This amount includes all paid services and excludes informal care. The report defines paid long-term care as a range of services including personal and therapeutic care at home, community centers and assisted living communities and nursing facilities.
Other findings in the report:
- 25% of the time, the expected individual cost of long-term care services is less than $26,000, and another 25% of the time, costs are more than $240,000. A 5% chance exists that the expected cost is more than $578,000, according to the authors. The range can be attributed to several factors, such as condition as well as type and location of service.
- 16% of women outlive their benefits, compared with 9% of men.
- Connecticut is the most expensive state for long-term care; there, individuals will need an average of $244,000 to cover costs. Massachusetts was No. 2, at $236,000.
- Nebraska had the lowest costs, at $130,000. Arizona was the second-lowest, at $137,000.
“The picture we paint in this report has several implications for financing of long-term care risks,” the authors stated. “The average estimated cost is a significant sum, and long-term care financing should be a consideration in any personal retirement financial plan.”
For more information on the report, visit the PwC website.