Women and Long-Term Care: From a Financial Advisor

As healthcare costs keep rising, planning for long-term care is now a key part of a good retirement plan. Without proper preparation, these costs can be a big threat to financial independence. This is especially true for women, who already face unique challenges in retirement planning.

Below, we explore five key reasons why women should factor long-term care expenses into their financial plans.

1. Women Face Financial Hurdles Throughout Their Careers

Despite strides toward workplace equality, women continue to face financial disadvantages that can impact their retirement savings. On average, women earn less than men, with an even greater gap for women of color. Many women leave their jobs to care for children or aging parents. This can lead to missed chances for salary growth and career advancement.

Over a lifetime, these factors can lead to lower retirement savings. This means there will be fewer resources for essential expenses, like long-term care.

2. Women Tend to Live Longer

Women generally live longer than men. The average American woman is expected to live about five years longer than the average man.

Living a long life is a gift. However, it also means a longer retirement. This can lead to a greater need for long-term care services.

In fact, women make up 75% of nursing home residents. Without proper financial planning, the costs of extended care can quickly deplete retirement savings.

3. Women Experience Higher Rates of Chronic Illness

Living longer doesn’t necessarily mean living healthier. Research shows that women are more likely than men to have long-term health problems. These include arthritis, high blood pressure, and vision issues. These conditions can lead to increased medical expenses and a greater need for long-term care support.

A good financial plan should have strategies for healthcare needs. It should ensure access to quality care without causing financial stress.

4. Women Are More Likely to Live Alone in Their Later Years

Since women generally outlive their spouses or partners, they often find themselves living alone in old age. Research shows that more people over 80 are living alone.

Women make up 74% of these solo households. Without a partner or family member at home, many women must depend on professional long-term care services. These services can be expensive.

5. Women Frequently Serve as Caregivers

Women make up about 75% of unpaid caregivers in the U.S. They often take time off work or cut their hours to care for children, aging parents, or other family members.

Caregiving is an important job, but it can lead to long-term money problems. This includes lost wages and lower retirement savings. It can also make people rely more on Social Security benefits when they are older.

Ironically, people who spend years caring for others may not have enough money for their own long-term care later.

How Women Can Prepare for Long-Term Care

Given these challenges, proactive planning for long-term care is essential. Here are some strategies to consider:

●      Create a dedicated long-term care savings fund to ensure financial resources are available when needed.

●      Explore long-term care insurance to help cover costs and provide peace of mind.

●      Maximize retirement savings by contributing consistently and taking advantage of employer-sponsored plans.

●      Reduce unnecessary expenses now to allocate more funds toward future care needs.

By taking steps today, women can strengthen their financial security and enjoy greater peace of mind in retirement. Planning ahead is the key to maintaining independence and ensuring a comfortable future.

Sources:

https://www.aaltci.org/long-term-care-insurance/learning-center/for-women.php

https://pubmed.ncbi.nlm.nih.gov/11211557/

Disclosures:

This information is an overview and should not be considered as specific guidance or recommendations for any individual or business.

This material is provided as a courtesy and for educational purposes only.

These are the views of the author, not the named Representative or Advisory Services Network, LLC, and should not be construed as investment advice. Neither the named Representative nor Advisory Services Network, LLC gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your Financial Advisor for further information.