An updated analysis by the National Council on Aging (NCOA) and LeadingAge LTSS Center @ UMass Boston finds that 80% of Americans 60 and older continue to have very few resources to pay for long-term care or weather financial emergencies. While older adults’ incomes and the net value of their homes increased slightly from 2018-2020, the value of their financial assets and total wealth decreased.
“This is a snowballing crisis,” said Ramsey Alwin, NCOA President and CEO. “At the same time that 11,000 people are turning 65 every day for the next several years, a growing number of older adults are facing financial stress now and will not be able to afford the care they will need in the future.”
Increases in Older Americans’ Income and Household Assets Still Cannot Support Most During Financial Hardship compares the income, housing value, retirement, and other savings of people 60 and older with the cost of paying for long-term care and with the Elder Index, an online tool that shows how much money older adults need to live independently.
Key findings:
The bottom 20% of Americans 60 and older (15 million households) have no assets. In fact, some are in debt. This group had a median income of $18,000 in 2020 and is facing economic insecurity. Almost 90% of them had household incomes below the Elder Index level.
About half (49.6%) of those 60 and older (a little over 27 million households) have an average income below what they need to cover their basic needs, as calculated by the Elder Index.
Despite older adults’ preference to age in place, 60% are unable to afford two years of in-home long-term services and supports (LTSS).
“These findings certainly show that despite gains in income, many millions of older adults continue to live on the edge,” said Dr. Marc Cohen, co-author of the report and Co-Director of the LeadingAge LTSS Center at UMass Boston. “This reality highlights just how important it is to make sure that our social safety net programs are preserved and strengthened.”
LTSS is one of the most significant costs for older adults. It ranges from assistance with activities such as bathing and dressing to medical care in a skilled nursing facility. While many Americans underestimate the need for LTSS, over half of adults 65 and older will need these services for less than two years, and about one in seven will require care for more than five years. In 2023, the median yearly cost of a home health care aide was $75,504 and a private room in a nursing home was $116,800.
According to JAMA Network, over a 20-year period, more than 25% of adults 50+ will experience a shock resulting in a 75% or more drop in net wealth. Among adults 70 and older, more than two-thirds will experience at least one negative shock with financial consequences over a nine-year period.
Researchers at NCOA and the LeadingAge LTSS Center @UMass Boston analyzed data from the 2020 Health and Retirement Study, a longitudinal panel study that surveys a representative sample of approximately 20,000 people in America, supported by the National Institute on Aging and Social Security Administration.
