Genworth’s “Cost of Care” mobile app can be downloaded from Apple’s iTunes store at no charge and lets advisors access national and long-term care costs from 437 regions across all 50 states. Its launch coincides with the release of the firm’s ninth annual Cost of Care survey.
While most people are quite pleased to be living longer and more active lives, it’s costing them much more. In fact, several studies have found that failing to accurately gauge and save for escalating and extended health care costs is one of the biggest threats to most Americans' retirement nest eggs.
“By providing specific data to clients based on where they want to receive care, plan to retire and the type of care needed, the Cost of Care Survey paints a clear picture of current and future costs associated with long-term care,” Colleen Goldhammer Benzin, senior vice president of Genworth’s long-term care distribution unit, said in a statement. “It is a powerful tool to show how costs may seem manageable while still earning income, but when retired, in say 15 years, the cost could deplete the clients’ assets.”
Genworth’s survey found that the national median cost of homemaker services and home health aide services is $18 and $19 an hour, respectively, while the median annual cost for care in an assisted living facility is $39,600 nationally.
This annual amount represents an increase of 1.2% since 2011 and a 5.7% annual increase over the past five years. Genworth officials said comparable cost for a private nursing home room rose 4.2% from 2011 to 2012 to $81,030, or 4.3% annualized over the past five years.
At the same time that these costs are expanding, retirees and pre-retirees are finding they have fewer and fewer LTC insurance options.
Just last month, Prudential Financial, the second-largest U.S. life insurer, joined competitors Allianz Life, MetLife and Unum in exiting the individual long-term care insurance market. All of the insurers cited general economic uncertainty, low interest rates and spiraling health care costs as primary reasons for their exodus.
Genworth's mobile app allows advisors and clients to compare daily, monthly and annual costs for up to three regions across the U.S., giving people an idea of how relocating to their desired retirement destination would impact their LTC costs.
It also can calculate the projected cost of care 10, 15, 20, 25 and 30 years out to help plan for the future and lets users share the information with loved ones.
“With more care options available to consumers today than ever before, it’s essential that advisors sit down with their clients and help create a holistic plan for long-term care,” Benzin said.
Larry Barrett writes for Financial Planning.