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Why Is Long Term Care Planning So Important For Women?

Tania and I were talking the other day about long term care.  She asked me, “Aren’t women more likely to need long term care than men?  Why don’t you write an article about it?” 

My first thought was, “There’s got to be a bunch of information on this topic already.  There must be plenty of financial planners who have already written this exact article.”  I googled the phrase, “Why is Long Term Care Planning So Important For Women,” expecting a ton of articles.  There was exactly one result.  And that result is a 54-page life insurance presentation.   

And that’s a shame.  Because as women get older, and are officially outliving their male spouses, long term care becomes a much more pressing concern.  Here are five reasons why. 

Long Term Care Planning Consideration 1:  Women live longer than men. 

While it’s a bad idea to state absolutes, this is almost universally accepted as fact.  According to virtually every major longevity study conducted, women live longer than men.  This is true regardless of country, region, or socioeconomic status.  The National Institutes of Health has numerous studies that support this conclusion.  

The Male-Female Health-Survival Paradox:  A Comparative Perspective in Sex Differences in Aging and Mortality is a collection of papers that tries to understand WHY women outlive men.  One paper studied factors that are related to longer living, such as handgrip strength and activities of daily living (ADLs).  Though the paper outlines how men generally outperform women when it comes to these longevity factors, women still outlive men. 

This gender-based difference in longevity is shown in insurance rates.  All other factors aside, women generally pay less for life insurance than men.  And more for long-term care insurance. 

The fact is, there is no clear reason identifying WHY women are living longer. 

Long Term Care Planning Consideration 2:  Women are more prone to chronic, permanently disabling conditions. 

If women live longer than men, it makes sense that more women will have chronic conditions, such as arthritis.  The CDC conducted a study which showed the percentage of adults with one or more of the following chronic conditions:  arthritis, asthma, cancer, cardiovascular disease, chronic obstructive pulmonary disease (COPD), and diabetes.  Across every age group, women were more likely than men to have one or more, two or more, or three or more chronic conditions.  This is an important observation when you look at the CDC’s most recent study on the causes of elderly death.  Five of the six chronic conditions represent about 60% of the total deaths in elderly persons.   

So there’s a pretty clear relationship between gender and the likelihood of developing a life-threatening condition.  Still, women live longer than men.  So that can mean only one thing: women are also likely to experience a life-threatening condition and survive it.  And most of these conditions usually require ongoing care.   

Also, many of these are correlated with decreasing health.  Someone who develops COPD is usually going to experience deterioration, not recovery.  This degeneration is especially true when it comes to cognitive disorders, such as Alzheimer’s disease and dementia.  Currently, Alzheimer’s disease is listed as the sixth leading cause of elderly death, and is the major disease that cannot be prevented, cured, or even slowed.   

And women are more likely to develop Alzheimer’s disease than men.  More importantly, women are more likely to be caregivers for those with Alzheimer’s.  This mirrors another important trend. 

Long Term Care Planning Consideration 3:  Women generally are the family caregivers. 

According to the Family Caregiver Alliance, an estimated two-thirds of all family caregivers are female.  In fact, it is estimated that the informal long-term care (care provided outside the scope of paid providers) that women provide is around $150 to $188 billion per year, or around 7% of the estimated $2.8 trillion long term care burden that America currently faces.  When you consider that the average lifetime cost of long-term care is around $172,000, that’s a lot of care!   

The Family Caregiver Alliance goes on to say that the average caregiver is a 49 year old woman who works outside the home and contributes 20 hours per week of unpaid care to her mother.  That says a lot, especially when saddled next to another important trend:  parenthood age. 

Since 2000, the average age of first-time motherhood has gone up.  This makes sense, when as a society we’ve made progress in lowering teen pregnancy, which is directly correlated with poverty.  Additionally, many women, particularly highly educated professionals, are having children later in life.  According to Pew Study Research, the median age of first-time mothers with a master’s degree is 30.  In comparison, the median age of first-time mothers with a high school education (or less) is just 24.   

This also makes sense, as most people (men and women) usually try to put off parenthood until they’ve completed college.  But it also coincides with the caregiver trend.  Women are increasingly raising children AND caring for an aging adult relative.  This phenomenon, also referred to as the sandwich generation, occurs equally amongst men and women.  But many studies show that the workload falls disproportionately on the shoulders of women.    

And this leads us directly to our next point.   

Long Term Care Planning Consideration 4:  It’s harder for women to achieve financial independence than men. 

There really isn’t a clear-cut study that proves women are less likely to be financially independent than men.  But it’s pretty clear that women generally experience more obstacles than men do when trying to become financially independent.  Here are a few of the factors or trends that stack up against women: 

  • Gender pay gap.  Most people know this.  The military is one of a few places where women earn the same as men for the same work.  That’s because military pay tables only consider rank and time in service in pay calculations 
  • Years in workforce.  Women are faced with a tough lifelong decision when it comes to balancing work and raising a family.  While many women are able to have successful careers while raising families, there usually is a tradeoff.  Women spend fewer years in the workforce than men do.  Additionally, when women return to work, it’s not always full time.  According to Department of Labor statistics, women make up almost two-thirds of part time workers.  Many of these women are mothers who are trying to re-enter the workforce after their children are old enough to not require constant care.  Additionally, women end up having to prioritize their other caregiving commitments (such as caring for their elders) at the expense of their job. 
  • Career earnings.  When you combine the gender pay gap with fewer years in the workforce, it’s no surprise that women can expect a lower amount of career earnings than their male counterparts.   

Clearly, women are just as capable of reaching financial independence as men.  There’s no reason why an able woman, with financial independence as her top priority, wouldn’t be able to achieve that goal.  However, women are less likely than men to prioritize financial independence (traditionally referred to as retirement savings) than men.  According to a survey of 5000 people, conducted by AARP, working men ranked retirement savings as their number one goal.  Working women ranked retirement as number 5, behind living costs, paying bills, covering housing costs, and general-purpose savings.  And that’s not even taking into consideration all of the non-financial priorities women face, such as caring for the other people in their life.  This leads us to our final problem. 

Long Term Care Planning Consideration 5:  Elderly women are more likely to experience poverty than men. 

This is a depressing statement.  Unfortunately, it is completely true, and there are numerous studies to support this conclusion.  Probably the most daunting statement comes from the Social Security Administration: 

The overall poverty rate is almost two-thirds higher in women (12%) than in men (7%).  Unmarried women—including those who are widowed (16.3% vs 9.2%), divorced (18.4% vs 12.8%), and never married (26.1% vs. 20.4%)—are significantly more likely than unmarried men to be poor. 

And according to the Centers for Medicare and Medicaid Services, women accounted for 71% of all Medicaid spending for elderly persons (age 65 and above) in 2012. 

What Should I Do About Long Term Care? 

So not only are women more likely to live longer than men, they’re also going to need long term care for more of their life and have less money available when they need it.  But it doesn’t need to be that way.  Here are a few things that women can (and should) focus on, so that this doesn’t happen to them.  

  • Financial education.  This is a probably the single most important way that a woman can ensure that her long term care plan is intact.  After all, the more you know about your finances, the more control you’ll have over your financial future.  And there are plenty of online resources specifically for women.   
  • Talk about estate and long term care planning with your loved ones.  This is more than just talking with your spouse about what to do when something happens.   
  • If you have aging relatives, have this conversation with THEM!  If you know that you’re expected to care for an older relative, then start talking now.  Have a conversation about their wishes, resources, and plans.  If you have children at home, then set clear expectations in advance—either for your relative, or for yourself and your spouse. 
  • If you have adult children, then talk with them as well.  They should know what your plans are, and be involved in conversations.  Even if they’re not immediately able to care for an aging relative (because of college, for example), they might be in a position to do so in the future.  And they should know what to expect for when it’s your turn. 
  • Look into the costs of long term care.  If you’re in your 50s, you’re not too young to start looking into your future long term care needs.  Even if you can’t afford or choose not to purchase long term care insurance, you can still research facilities, skilled nursing care, and state partnership programs.  Starting this research earlier rather than later will keep your options open. 
  • Talk with a financial planner.  If you believe that you can’t do this by yourself, a fee-only financial planner can definitely help you figure out what’s right for you.  Start within your network of friends and colleagues, and ask for recommendations.  However, make sure that your financial planner is a fiduciary, which means that they always act in your best interests first.  Many financial planners are fee-only, which means they don’t earn their money by commission.  A commission-based advisor may have an incentive to sell you an insurance product that you don’t need, just to receive a larger commission.  If you don’t know where to find a fee-only financial planner, you can go to the National Association of Personal Financial Advisors (NAPFA).  That way, you can find several financial planners in your area. 
  • Contact us. We are always available to answer questions about long term care options. We will sit down with you, discuss how to get started and what the next steps are. We have existing relationships and can point you in the right direction. Go ahead and schedule a call now. 
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