New survey highlights caregivers’ retirement conundrum

A new survey from Nationwide sheds much-needed light on a growing predicament, as many Americans find themselves sandwiched between their need to retire in comfort and their responsibility to care for aging and ailing relatives.

The Nationwide Retirement Institute's annual Long-Term Care survey reveals that many Americans are grappling with the high costs associated with providing long-term care for themselves and their loved ones, impacting their ability to retire comfortably.

The survey, which polled 1,334 US adults aged 28 and older with household incomes of $75,000 or higher, highlighted the financial sacrifices people are making to balance caregiving responsibilities with long-term financial stability.

Steep costs breed financial dilemmas

Among those surveyed, 43 percent fear that caregiving expenses will prevent them from ever retiring. Fifty-six percent said they’re willing to take a loan from their retirement account to be a caregiver for a relative, while 42 percent said they’ll likely have to use up money they’d planned for their children if they ever had to become a caregiver.

Many caregivers face substantial out-of-pocket expenses, averaging $338 per month on items such as co-pays, prescription medications, and transportation. Compounding the financial strain, 15 percent of respondents had to transition to part-time work or take lower-paying, more flexible jobs to accommodate caregiving duties.

Despite these challenges, only 17 percent of adults have discussed long-term care planning with a financial professional. Among those who have not had these discussions, 30 percent reported that their financial advisors had not brought up the topic.

“Long-term care planning is complicated and emotional, and has a huge impact on financial wellbeing,” Holly Snyder, president of Nationwide’s life insurance business, said in a statement. “Our data shows that Americans would benefit from taking a more proactive approach to financial planning.”

For many Americans, the price is wrong on long-term care insurance

The survey also highlighted misconceptions about long-term care insurance.

Only one in five respondents had purchased long-term care insurance, with nearly half citing cost as a barrier. When asked to estimate the cost of a sample long-term care insurance policy, 20 percent guessed it would be $500 or more per month, while the actual cost is closer to $130 per month. After learning the correct cost, 40 percent said they would consider purchasing such a policy.

“Because most people assume long-term care insurance isn’t affordable, they don’t purchase a policy, which can leave them saddled with hefty long-term care costs later in life,” Snyder added.

A modest majority of respondents have high hopes for AI to address their long-term care needs. The survey revealed 54 percent of respondents expect AI and robotics to become affordable tools for assisting with daily living tasks, potentially easing financial and emotional strains.

While one-third (32 percent) of Americans doubt they will ever be able to afford long-term care at home, 37 percent believe AI they can turn to AI for in-home care. Another 53 percent expect it to make caregiving easier by alerting them to medical emergencies (47 percent) or helping to manage medications and appointments (36 percent).

One-third of participants in the survey anticipate AI could extend their lives by an average of six years, with 36 percent of caregivers expecting it to add seven more years for those they care for.