(MONEY Magazine) – Most people's foremost fear in planning their retirement is simply outliving their money. Yet that terror can be tamed by Social Security, a pension and a well-planned program of personal savings and investments.

What should rank as the No. 1 financial fear of growing old is the cost of long-term care for people too feeble or crippled by illness to look after themselves -- a nonstop expense that can quickly deplete resources built up over a lifetime.

Now this problem too can be alleviated. Growing numbers of insurance companies are offering long-term-care policies that are more comprehensive and affordable than earlier versions. The longer we live, the more likely it is that we will have to pay others to dress and groom us, feed us and move us around.

Americans' life expectancy at age 65 is increasing dramatically. Since 1940, the chances of living another 20 years have doubled, from one in five to two in five, and they are expected to rise to three in five by the year 2030.

With longevity comes a new set of medical problems. Where once debility came largely from strokes, cancer or other acute diseases, for the over-85 generation it is more likely to come as a gradual loss of the ability to take care of oneself. People live for years with chronic ailments such as Alzheimer's disease and osteoporosis, which seldom require long hospital stays but render the victims more and more helpless.

In the past, the duty of caring for them fell to their children or other family members. Now, with the generations dispersed geographically, the givers of care tend to be paid strangers.

The cost can be crushing. At average rates, nursing homes charge $73,000 a year, and the fees are escalating in step with inflation. Home-care services, which include physical therapy, administration of drugs and food preparation, are $80 to $150 a day. Few people are up to the costs.

Rest of Article on Money Magazine

© Money Magazine

Back to Articles