Latest news with #CarolynMcClanahan
Yahoo
30-05-2025
- Business
- Yahoo
'It's A Huge Problem,' Experts Urge Gen Xers And Millennials To Plan For Long-Term Care
The U.S. Department of Health and Human Services says that around 57% of Americans will need long-term care at some point Most households have grossly underestimated the potential cost of that long-term care, and aren't aware that they will have to pay out of pocket for much of it The total cost of long-term care can be significant, extending beyond $100,000 Long-term care costs can be significant, extending well beyond $100,000, but experts tell CNBC that most households aren't prepared to handle the expense. "People don't plan for it in advance," certified financial planner Carolyn McClanahan told the network. "It's a huge problem." A 2022 report by the U.S. Department of Health and Human Services and the Urban Institute says that 57% of Americans turning 65 will develop a disability that is serious enough to require long-term care. The average cost of this long-term care is $122,400, the report said. Don't Miss: Deloitte's fastest-growing software company partners with Amazon, Walmart & Target – Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — On average, families will pay for 37% of the total cost of this long-term care out of pocket, with the rest covered by insurance and public programs. "It's pretty clear [workers] don't have that amount of savings in retirement, that amount of savings in their checking or savings accounts, and the majority don't have long-term care insurance," Employee Benefit Research Institute strategist Bridget Bearden told CNBC. "So where is the money going to come from?" Costs for long-term care vary widely, depending on where you live. However, data collected by Genworth and CareScout put the national average for a home health aide at $6,483 per month and $5,900 for a spot in an assisted living facility. Trending: Maximize saving for your retirement and cut down on taxes: . Still, many people grossly underestimate how much long-term care could potentially cost them. A recent Employee Benefit Research Institute report found that "a significant proportion of future caregivers had not estimated LTC costs," and those who had expected them to remain under $50,000. Additionally, the report found that 43% of future caregivers expected Medicare to cover the costs of long-term care, and 29% expected Medicaid to foot the bill. Experts told CNBC that estimates like these are not realistic. Health insurance generally doesn't cover long-term care services, and Medicare only covers select aspects, they say. McClanahan told CNBC that Medicare typically covers skilled care for up to 100 days, which covers things like rehab or medicine administration, but will not cover the custodial care required for daily activities like bathing and for Medicaid, the largest payer of long-term care costs, not everyone will qualify. Most people who are eligible for these benefits come from low-income households. "You basically have to be destitute" for Medicaid to kick in, she said. "The challenge with long-term care costs is they're unpredictable," McClanahan told CNBC. "You don't always know when you'll get sick and need care." She advises Gen Xers and Millennials to begin planning for potential long-term care needs now. "When you think through it in advance, it keeps the decisions way more level-headed," she said. Read Next:'Scrolling To UBI' — Deloitte's #1 fastest-growing software company allows users to earn money on their phones. Image: Shutterstock UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga? APPLE (AAPL): Free Stock Analysis Report TESLA (TSLA): Free Stock Analysis Report This article 'It's A Huge Problem,' Experts Urge Gen Xers And Millennials To Plan For Long-Term Care originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Sign in to access your portfolio
Business Mayor
17-05-2025
- Health
- Business Mayor
Long-term care costs can be a 'huge problem,' experts say. Here's why
Kate_sept2004 | E+ | Getty Images Long-term care can be costly, extending well beyond $100,000. Yet, financial advisors say many households aren't prepared to manage the expense. 'People don't plan for it in advance,' said Carolyn McClanahan, a physician and certified financial planner based in Jacksonville, Florida. 'It's a huge problem.' Over half, 57%, of Americans who turn 65 today will develop a disability serious enough to require long-term care, according to a 2022 report published by the U.S. Department of Health and Human Services and the Urban Institute. Such disabilities might include cognitive or nervous system disorders like dementia, Alzheimer's or Parkinson's disease, or complications from a stroke, for example. The average future cost of long-term care for someone turning 65 today is about $122,400, the HHS-Urban report said. But some people need care for many years, pushing lifetime costs well into the hundreds of thousands of dollars — a sum 'out of reach for many Americans,' report authors Richard Johnson and Judith Dey wrote. The number of people who need care is expected to swell as the U.S. population ages amid increasing longevity. 'It's pretty clear [workers] don't have that amount of savings in retirement, that amount of savings in their checking or savings accounts, and the majority don't have long-term care insurance,' said Bridget Bearden, a research and development strategist at the Employee Benefit Research Institute. 'So where is the money going to come from?' she added. Long-term care costs can exceed $100,000 While most people who need long-term care 'spend relatively little,' 15% will spend at least $100,000 out of pocket for future care, according to the HHS-Urban report. Expense can differ greatly from state to state, and depending on the type of service. Nationally, it costs about $6,300 a month for a home health aide and $9,700 for a private room in a nursing home for the typical person, according to 2023 data from Genworth, an insurer. Here's a look at other stories impacting the financial advisor business. It seems many households are unaware of the potential costs, either for themselves or their loved ones. For example, 73% of workers say there's at least one adult for whom they may need to provide long-term care in the future, according to a new poll by the Employee Benefit Research Institute. However, just 29% of these future caregivers — who may wind up footing at least part of the future bill —had estimated the future cost of care, EBRI found. Of those who did, 37% thought the price tag would fall below $25,000 a year, the group said. The EBRI survey polled 2,445 employees from ages 20 to 74 years old in late 2024. Many types of insurance often don't cover costs Maskot | Maskot | Getty Images There's a good chance much of the funding for long-term care will come out-of-pocket, experts said. Health insurance generally doesn't cover long-term care services, and Medicare doesn't cover most expenses, experts said. For example, Medicare may partially cover 'skilled' care for the first 100 days, said McClanahan, the founder of Life Planning Partners and a member of CNBC's Financial Advisor Council. This may be when a patient requires a nurse to help with rehab or administer medicine, for example, she said. Where is the money going to come from? Bridget Bearden research and development strategist at the Employee Benefit Research Institute But Medicare doesn't cover 'custodial' care, when someone needs help with daily activities like bathing, dressing, using the bathroom and eating, McClanahan said. These basic everyday tasks constitute the majority of long-term care needs, according to the HHS-Urban report. Medicaid is the largest payer of long-term care costs today, Bearden said. Not everyone qualifies, though: Many people who get Medicaid benefits are from lower-income households, EBRI's Bearden said. To receive benefits for long-term care, households may first have to exhaust a big chunk of their financial assets. 'You basically have to be destitute,' McClanahan said. Republicans in Washington are weighing cuts to Medicaid as part of a large tax-cut package. If successful, it'd likely be harder for Americans to get Medicaid benefits for long-term care, experts said. Long-term care insurance considerations The Good Brigade | Digitalvision | Getty Images Few households have insurance policies that specifically hedge against long-term care risk: About 7.5 million Americans had some form of long-term care insurance coverage in 2020, according to the Congressional Research Service. By comparison, more than 4 million baby boomers are expected to retire per year from 2024 to 2027. Washington state has a public long-term care insurance program for residents, and other states like California, Massachusetts, Minnesota, New York and Pennsylvania are exploring their own. Long-term care insurance policies make most sense for people who have a high risk of needing care for a lengthy duration, McClanahan said. That may include those who have a high risk of dementia or have longevity in their family history, she said. McClanahan recommends opting for a hybrid insurance policy that combines life insurance and a long-term care benefit; traditional stand-alone policies only meant for long-term care are generally expensive, she said. Be wary of how the policy pays benefits, too, she said. For example, 'reimbursement' policies require the insured to choose from a list of preferred providers and submit receipts for reimbursement, McClanahan said. For some, especially seniors, that may be difficult without assistance, she said. With 'indemnity' policies, which McClanahan recommends, insurers generally write benefit checks as soon as the insured qualifies for assistance, and they can spend the money how they see fit. However, the benefit amount is often lower than reimbursement policies, she said. How to be proactive about long-term care planning 'The challenge with long-term care costs is they're unpredictable,' McClanahan said. 'You don't always know when you'll get sick and need care.' The biggest mistake McClanahan sees people make relative to long-term care: They don't think about long-term care needs and logistics, or discuss them with family members, long before needing care. For example, that may entail considering the following questions, McClanahan said: Do I have family members that will help provide care? Would they offer financial assistance? Do I want to self-insure? What are the financial logistics? For example, who will help pay your bills and make insurance claims? Do I have good advance healthcare directives in place? For example, as I get sicker will I let family continue to keep me alive (which adds to long-term care expenses), or will I move to comfort care and hospice? Do I want to age in place? (This is often a cheaper option if you don't need 24-hour care, McClanahan said.) If I want to age in place, is my home set up for that? (For example, are there many stairs? Is there a tiny bathroom in which it's tough to maneuver a walker?) Can I make my home aging-friendly, if it's not already? Would I be willing to move to a new home or perhaps another state with a lower cost of long-term care? Do I live in a rural area where it may be harder to access long-term care? Being proactive can help families save money in the long term, since reactive decisions are often 'way more expensive,' McClanahan said. 'When you think through it in advance it keeps the decisions way more level-headed,' she said.
CNBC
17-05-2025
- Health
- CNBC
Long-term care costs can be a 'huge problem,' experts say. Here's why
Long-term care can be costly, extending well beyond $100,000. Yet, financial advisors say many households aren't prepared to manage the expense. "People don't plan for it in advance," said Carolyn McClanahan, a physician and certified financial planner based in Jacksonville, Florida. "It's a huge problem." Over half, 57%, of Americans who turn 65 today will develop a disability serious enough to require long-term care, according to a 2022 report published by the U.S. Department of Health and Human Services and the Urban Institute. Such disabilities might include cognitive or nervous system disorders like dementia, Alzheimer's or Parkinson's disease, or complications from a stroke, for example. The average future cost of long-term care for someone turning 65 today is about $122,400, the HHS-Urban report said. But some people need care for many years, pushing lifetime costs well into the hundreds of thousands of dollars — a sum "out of reach for many Americans," report authors Richard Johnson and Judith Dey wrote. The number of people who need care is expected to swell as the U.S. population ages amid increasing longevity. "It's pretty clear [workers] don't have that amount of savings in retirement, that amount of savings in their checking or savings accounts, and the majority don't have long-term care insurance," said Bridget Bearden, a research and development strategist at the Employee Benefit Research Institute. "So where is the money going to come from?" she added. While most people who need long-term care "spend relatively little," 15% will spend at least $100,000 out of pocket for future care, according to the HHS-Urban report. Expense can differ greatly from state to state, and depending on the type of service. Nationally, it costs about $6,300 a month for a home health aide and $9,700 for a private room in a nursing home for the typical person, according to 2023 data from Genworth, an insurer. Here's a look at other stories impacting the financial advisor business. It seems many households are unaware of the potential costs, either for themselves or their loved ones. For example, 73% of workers say there's at least one adult for whom they may need to provide long-term care in the future, according to a new poll by the Employee Benefit Research Institute. However, just 29% of these future caregivers — who may wind up footing at least part of the future bill —had estimated the future cost of care, EBRI found. Of those who did, 37% thought the price tag would fall below $25,000 a year, the group said. The EBRI survey polled 2,445 employees from ages 20 to 74 years old in late 2024. There's a good chance much of the funding for long-term care will come out-of-pocket, experts said. Health insurance generally doesn't cover long-term care services, and Medicare doesn't cover most expenses, experts said. For example, Medicare may partially cover "skilled" care for the first 100 days, said McClanahan, the founder of Life Planning Partners and a member of CNBC's Financial Advisor Council. This may be when a patient requires a nurse to help with rehab or administer medicine, for example, she said. But Medicare doesn't cover "custodial" care, when someone needs help with daily activities like bathing, dressing, using the bathroom and eating, McClanahan said. These basic everyday tasks constitute the majority of long-term care needs, according to the HHS-Urban report. Medicaid is the largest payer of long-term care costs today, Bearden said. Not everyone qualifies, though: Many people who get Medicaid benefits are from lower-income households, EBRI's Bearden said. To receive benefits for long-term care, households may first have to exhaust a big chunk of their financial assets. "You basically have to be destitute," McClanahan said. Republicans in Washington are weighing cuts to Medicaid as part of a large tax-cut package. If successful, it'd likely be harder for Americans to get Medicaid benefits for long-term care, experts said. Few households have insurance policies that specifically hedge against long-term care risk: About 7.5 million Americans had some form of long-term care insurance coverage in 2020, according to the Congressional Research Service. By comparison, more than 4 million baby boomers are expected to retire per year from 2024 to 2027. Washington state has a public long-term care insurance program for residents, and other states like California, Massachusetts, Minnesota, New York and Pennsylvania are exploring their own. Long-term care insurance policies make most sense for people who have a high risk of needing care for a lengthy duration, McClanahan said. That may include those who have a high risk of dementia or have longevity in their family history, she said. McClanahan recommends opting for a hybrid insurance policy that combines life insurance and a long-term care benefit; traditional stand-alone policies only meant for long-term care are generally expensive, she said. Be wary of how the policy pays benefits, too, she said. For example, "reimbursement" policies require the insured to choose from a list of preferred providers and submit receipts for reimbursement, McClanahan said. For some, especially seniors, that may be difficult without assistance, she said. With "indemnity" policies, which McClanahan recommends, insurers generally write benefit checks as soon as the insured qualifies for assistance, and they can spend the money how they see fit. However, the benefit amount is often lower than reimbursement policies, she said. "The challenge with long-term care costs is they're unpredictable," McClanahan said. "You don't always know when you'll get sick and need care." The biggest mistake McClanahan sees people make relative to long-term care: They don't think about long-term care needs and logistics, or discuss them with family members, long before needing care. For example, that may entail considering the following questions, McClanahan said: Being proactive can help families save money in the long term, since reactive decisions are often "way more expensive," McClanahan said. "When you think through it in advance it keeps the decisions way more level-headed," she said.
NBC News
25-03-2025
- Business
- NBC News
50% of parents financially support adult children, report finds. Here's how much it costs them.
To get by these days, more young adults turn to a likely source for help: their parents. For the first time, 50% of parents with a child older than 18 provide them with at least some financial support, according to a new report by That's up from 47% last year and 45% in 2023. From buying food to paying for a cellphone plan or covering health and auto insurance or even rent, these parents are shelling out about $1,474 a month, on average, the report found — a three-year high. 'Adulting is expensive,' the report notes. Many experts argue it's harder today for young adults to make it on their own. In addition to soaring everyday expenses and housing costs, millennials and Generation Z face other financial challenges their parents did not at that age. Not only are their wages lower than their parents' earnings when they were in their 20s and 30s, after adjusting for inflation, but they are also carrying larger student loan balances, many reports show. But by other measures, young adults are doing well. Compared with their parents at this age, Gen Zers are more likely to have a college degree and work full time. Plus, many millennials have more saved for retirement than they did just a few years ago, after reaping the benefits of positive market conditions. Yet, roughly 1 in 3 adults ages 18 to 34 in the U.S. live in their parents' home, according to U.S. Census Bureau data. 'Housing is a big issue and parents are helping more and more with rent and home purchases,' said Carolyn McClanahan, a certified financial planner and founder of Life Planning Partners in Jacksonville, Florida. 60% of parents risk their own financial security In addition to the monthly expense, supporting grown children can come with a long-term cost. More than 60% of parents said they have sacrificed their own financial security for the sake of their kids, also a jump from previous years, found. The site polled more than 1,000 parents of adult children in February. Further, about 18% of parents supporting adult children said those financial contributions could continue indefinitely. 'They don't see an end in sight,' said Beth Klongpayabal, the study's lead data analyst. As a general rule, you should set aside money for your own retirement and emergency fund first, McClanahan said. She also suggests parents set parameters to help ensure children are using the money they gift wisely. 'We are careful to make sure parents don't gift so much to put themselves in peril,' said McClanahan, who also is a member of CNBC's Advisor Council.
The Hill
18-03-2025
- Business
- The Hill
Record number of Americans working more than one job
(NewsNation) — At least 5 percent of the American workforce has a second job, according to the Bureau of Labor Statistics (BLS). In a release earlier this month, the BLS reported that a record high of approximately 8.9 million Americans stated they work multiple jobs. That is the highest rate since the Great Recession in April 2009. A March report from the Federal Bank of St. Louis revealed that 50.2 percent of multiple job holders in 2024 had a college degree, which is a 9.1 percent increase from 2019. 'If you're going to try to have some semblance of a traditional life with kids, and a house and transportation, [it] takes a lot of money to do that,' Carolyn McClanahan, certified financial planner, told CNBC. 'If employers are seeing soft demand for labor and cutting hours, that's another reason why people are taking on additional jobs to fill the week and to fill their bank accounts,' Julia Pollak, chief economist at ZipRecruiter, told the outlet. The data comes less than a year after a July 2024 Bankrate survey showed that the share of people with side hustles dropped from 2023 — with 36 percent of adults reporting a second job compared to 39 percent the year before. But, even as inflation seemingly cools, 32 percent of those with a second gig say they believe extra work will always be needed to make ends meet, according to the poll.
