Families’ Resources for Financing Long-term Care (LTC) Have Declined Precipitously

According to “Family Net Worth Drops to Level of Early ’90s, Fed Says” (New York Times, June 12, 2012), the median American family’s net worth in 2010 has dropped to its level in the early 1990s – a 40% reduction from $126,400 in 2007 to $77,300 in 2010!  Three quarters of the drop was caused by the crash in housing prices so although we may regain a portion of our losses, it will likely be many years before we climb back up to the 2007 figure in real dollars. 

Furthermore, median income also declined from $49,600 to $45,800 during the same period. So Americans are earning less and have far less in reserve, thanks to the catastrophic recession beginning in 2007. 

What does this mean for the 75% of Americans who will need LTC after they reach age 65?  Even though they may be struggling to make ends meet in these hard times, they had better budget for reasonably priced LTC insurance premiums NOW to ensure options, dignity & choices in accessing the care they need.  Otherwise, they may find themselves bankrupt and marooned in a Medicaid nursing home.