One of the most often over-looked aspects of retirement planning is the burden of elderly care costs. All too often most people assume they will pass on or before the average age of life expectancy. Or sometimes they simply forget that their bodies will be weaker and they will likely require additional funding to cover expenses they don’t deal with currently. Unfortunately, however, the amount of extra money needed for proper elderly care is nothing short of significant.
Statistics for Elderly Care Costs:
The following is a select list of the statistics from the Administration on Aging:
• The older population (65+) numbered 40.4 million in 2010, an increase of 5.4 million or 15.3% since 2000.
• Persons reaching age 65 have an average life expectancy of an additional 18.8 years (20.0 years for females and 17.3 years for males).
• Older women outnumber older men at 23.0 million older women to 17.5 million older men.
• Older men were much more likely to be married than older women–72% of men vs. 42% of women. 40% older women in 2010 were widows.
• About 29% (11.3 million) of non-institutionalized older persons live alone (8.1 million women, 3.2 million men).
• Almost half of older women (47%) age 75+ live alone.
• About 485,000 grandparents aged 65 or more had the primary responsibility for their grandchildren who lived with them.
• The population 65 and over has increased from 35 million in 2000 to 40 million in 2010 (a 15% increase) and is projected to increase to 55 million in 2020 (a 36% increase for that decade).
• The 85+ population is projected to increase from 5.5 million in 2010 and then to 6.6 million in 2020 (19%) for that decade.
• Minority populations have increased from 5.7 million in 2000 (16.3% of the elderly population) to 8.1 million in 2010 (20% of the elderly) and are projected to increase to 13.1 million in 2020 (24% of the elderly).
• The median income of older persons in 2010 was $25,704 for males and $15,072 for females. Median money income (after adjusting for inflation) of all households headed by older people fell 1.5% (not statistically significant) from 2009 to 2010. Households containing families headed by persons 65+ reported a median income in 2010 of $45,763.
• The major sources of income as reported by older persons in 2009 were Social Security (reported by 87% of older persons), income from assets (reported by 53%), private pensions (reported by 28%), government employee pensions (reported by 14%), and earnings (reported by 26%).
• Chance an individual will have more $25,000 in out-of-pocket continuing care costs: 1 in 5
• Social Security constituted 90% or more of the income received by 35% of beneficiaries in 2009 (22% of married couples and 43% of non-married beneficiaries).
• Almost 3.5 million elderly persons (9.0%) were below the poverty level in 2010. This poverty rate is not statistically different from the poverty rate in 2009 (8.9%). During 2011, the U.S. Census Bureau also released a new Supplemental Poverty Measure (SPM) which takes into account regional variations in the livings costs, non-cash benefits received, and non-discretionary expenditures but does not replace the official poverty measure. The SPM shows a poverty level for older persons of 15.9%, an increase of over 75% over the official rate of 9.0% mainly due to medical out-of-pocket expenses.
• About 11% (3.7 million) of older Medicare enrollees received personal care from a paid or unpaid source in 1999.
Readers – Have you ever considered how crazy the costs of elderly care can be when planning ahead for your retirement?
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