1. What percentage of baby boomers think they will need long-term care (help with daily activities) as they age, and what percentage actually will need long-term care?
2. What percentage of long term care is provided by family or friends?
3. If there are seven potential (unpaid) family caregivers (age 45 to 64) for every person over 80 today, how many will there be in 30 years?
4. What percentage of baby boomers have no idea of the cost of home care or nursing care?
5. What percentage of baby boomers have enough funds saved to pay for their own long term care?
1. 36 percent and 70 percent
2. 80 percent
4. 80 percent
5. 10 percent
Based on two recently released studies, one by AARP and the second by Bankers Life and Casualty Company’s Center for a Secure Retirement, most boomers won’t have enough money to pay for their own care and will be far less able to rely on family and friends for help.
When it comes to their own long-term care, today’s 80-plus year olds are in far better shape than boomers will be.
Many of those over 80 have pensions that provide good supplemental income to their Social Security. They were born at the time of the Great Depression and learned from their parents the value of saving. Many have greatly appreciated real estate values that can fund the high cost of being cared for.
And most of them have boomer kids (78 million of them) who have become the cement of long term care for their generation.
Few folks see the approaching crisis for boomers because it is masked by today’s economics. A large percentage of those currently over 80 have the financial and human capital to help with their care. So why would we think it would be any different 30 years from now?
We all know the boomer economics: Boomers were raised in the heyday of the credit card and they were encouraged to spend to fuel the economy. Their financial struggle to amass enough savings to pay for their care might be predictable.
What isn’t predictable, except maybe to actuaries, is that as boomers move into their 80s, there will only be a very small increase in family caregivers in the 45- to 64-year-old range. Why?
More boomer women are childless and when they did have kids, they had fewer of them. So we have a smaller population of children to provide care for their boomer parents.
According to the AARP study, “Baby Boom and the Growing Care Gap,” by the year 2030, the population of caregivers will increase by just 1 percent, while the 80-plus population is projected to increase by a whopping 79 percent. The large size of the boomer generation—and the fact that people are living longer—are the reasons for the tremendous growth in the 80-plus population.
One health factor will also affect the number of boomers who will need care. If the baby boomer obesity rate holds steady, those who need care due solely to the complications that arise from obesity will increase from 11 million to 18 million.
This, in summary, is called “ the 2030 problem”: a large population spurt in the 80-plus demographic who will need care and who lack the funds to pay for that care and a family caregiver ratio that predicts there will be less family to provide that care.
The AARP study looked at the caregiver ratio to the 80-plus population by state. The care ratio in California will go from 7.7 in 2010 to 2.7 in 2050. If you have friends in Nevada, tell them to consider moving. They will go from 10 down to 2 potential caregivers for everyone above 80.
Having children provides no guarantee they will care for you, but as a boomer with no children I do ask myself this question: After caring for my parents, my in-laws and my neighbors, who will care for me?
It’s a question many of us need to start asking ourselves.