What Are The Odds (Of Needing Long-Term Care)?

Whenever I give a presentation about long-term care, inevitably there will be some discussion about the odds of needing a nursing home. For instance, one statistic from the federal department of Health and Human Services (HHS) indicates that only 15% of older adults will spend greater than two years in a nursing home. If you’re an optimist, then your bet is that there is an 85% chance of avoiding that outcome. The odds could be worse.

But more ominously, HHS indicates that 48% of people turning 65 will need some type of paid long-term care during their lifetime. While that may not be a nursing home, care at home or in assisted living may be required. Still, the optimist is saying it’s a flip of a coin and there’s a slightly better chance of not needing paid care.

We are all hoping to ‘beat the odds’ when it comes to long-term care in the future. No one wants to end up in a nursing home. Many are determined to ensure it never happens to them. These numbers give promise to avoiding that outcome. But the numbers are deceiving.

I had several clients in the last month tell me they were going to win the lottery, and that I should be on the lookout to help them with their newfound windfall. Right now, the odds of winning the Powerball are 1 in 292.2 million. That is a 0.00000034% chance of winning. You have a much greater chance of many more bizarre and/or unfortunate things happening during your lifetime than winning the jackpot. 

I don’t want to discourage you from playing — and I’m here to help if you win! A 15% chance of needing a nursing home for more than 2 years may seem like a small chance. Yet, that equates to about a 1 in 7 chance, whereas the jackpot win is a 1 in 292 million chance.

Planning for long-term care needs is no fun–in fact, most of us would do anything to avoid both planning for it and the eventuality of needing it. But the numbers are revealing, and by the way, the odds of needing care continue to increase at a faster pace once you hit the age of 65. 

There are many elder planning options available, from long-term care insurance, to life insurance with a long-term care benefit, to the use of trusts and other ideas as well. Furthermore, even if no planning is done and care ends up being needed, there are still options on the table to preserve at least a portion of your estate in the face of the long-term care spend-down. The best advice is to talk to an elder law attorney (such as Jeremy Wechsler) now and engage in an analysis and plan where feasible.