Long-term care financing is especially hard for older people who rent their homes, and that number is rising: Harvard/AARP report
Younger baby boomers might have particularly difficult problems paying for long-term care because they have lower rates of homeownership than previous generations, according to a report released Monday by the Harvard Joint Center for Housing Studies and the AARP.
A typical U.S. homeowner who is 65 or older has the financial means to pay for 3.5 years in a nursing home, 6.5 years of assisted living or nine years of home care, the report states. However, the typical renter only has enough wealth to pay for two months of assisted living. Nursing home care would deplete a typical renter's assets “in a matter of weeks.”
These numbers are especially troubling considering that baby boomers who currently are in their 50s have lower homeownership rates than preceding generations, and homeownership rates fell during the financial downturn among those approaching retirement. Also, “if current income distribution holds,” the ranks of low-income older renters will swell by 2.6 million by 2030, according to the report.
“This large age group may be unable to cover the costs of appropriate housing or long-term care in their retirement years,” the authors wrote in a press release accompanying the 40-page report.
The disparity between renters and owners is only part of a troubling situation that is developing, the authors warned. Whether in long-term care or other settings, the country generally is unprepared to meet the housing needs of its aging population, they concluded.
“While it is ultimately up to individuals and their families to plan for future housing needs, it is also incumbent upon policy makers at all levels of government to see that affordable, appropriate housing, as well as supports for long-term aging in the community, are available for older adults across the income spectrum,” stated Chris Herbert, acting managing director of the Joint Center for Housing Studies.
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