Long-term care supports 7.9 million Americans over the age of 65 who cannot successfully navigate day to day activities on their own due to their age, according to AARP. With retirement planning, this can be one vital yet expensive aspect that is sometimes overlooked.
These activities, according to the National Institute on Aging, include all the “activities of daily living” such as “bathing, dressing, grooming, using the toilet, eating, and moving around.” It also includes other “community services” such as transportation. The cost of providing these vital services, however, can strain the already thin budgets of retirees.
According to the U.S. Department of Health and Human Services, the national average cost for a private room in a nursing home is $7,698 a month. And according to a 2019 survey, the national median cost for a home health aide is $4,385 per month. Unfortunately, as AARP notes, Medicare “does not cover costs for extensive long-term services and support,” leaving many retirees and their families on the hook for the majority (if not all) of these costs. This is why it’s more important than ever that we protect pensions.
Pensions are the best way to guarantee security and dignity in retirement, helping retirees to afford the cost of long-term care, medication, and other critically important health care necessities that they need as they grow older.
For many older retirees, they simply do not have the option of continuing to work if they cannot perform all of the typical activities of daily living. And for many, relying solely on 401(k)s does not guarantee a secure retirement because 401(k)s are subject to the whims of the stock market, leaving workers vulnerable to sudden changes that could wipe out their life savings.
While pensions alone cannot solve the problem of affording long-term care, if these benefits are taken away, retirees will face even more difficulty in paying for long-term support and other medically necessary services.
