What do your retirement goals look like? Extended travel, more quality time with your children and grandchildren, picking up hobbies or personal pursuits, owning a beach cottage or mountain cabin? Before you start putting money aside for that RV, be sure to contemplate caregiving as a part of your postretirement years.
About 85 percent of older adults have at least one chronic disease and 60 percent have at least two, according to the U.S. Centers for Disease Control and Prevention. At some point in the progression of these illnesses, these people will need caregiving assistance.
On top of this, many older adults are caregiving for a spouse or adult child with an illness, disability or special needs. So, the majority of us will both need care and provide care in our 60s and beyond.
The reality is that illness and aging are expensive: More than three-quarters of family caregivers spend out of pocket on caregiving, a 2021 AARP study found, with expenses averaging more than $7,200 a year. Average annual costs for long-term care run from around $50,000 for assisted living to more than $100,000 for a private room in a nursing home. And hospital bills can pile up quickly after a major medical event.
It's a bad bet to take a wait-and-see approach to whether you or your caregivers will have enough assets to cover your needs. Developing a long-range plan ensures you and your loved ones have strong support and less overall stress when the time comes.
If you need a caregiver
Even if you’re currently as healthy as a horse, incorporate caregiving-supportive tools into your longevity planning. Run the numbers through retirement and benefits calculators and work with advisers to guide you on the different options available. This may include:
1. Saving and budgeting
Calculate the amount of money you expect to need in retirement, in times of good and poor health, and budget for both. For example: