As described on the website of the American Association for Long-Term Care Insurance (AALTCI), your risk of needing long-term care is either 0 percent (you will never need it) or 100 percent (you will need it). This is an oversimplification, but the point is you should not base your personal retirement plan on averages because your experience may not align with the average. When considering data regarding the amount of care a person needs, keep in mind that current data is based on previous generations who, on average, did not live as long—nor need as much care—as current and future generations likely will.
The U.S. Department of Health and Human Services (DHHS) says that approximately 70 percent of people over age 65 will require some degree of long-term care services during their lifetime.1 Some argue that this statistic is misleading because it includes those not only those who require assistance with the six activities of daily living (ADLs)—bathing, dressing, eating, toileting, transferring, and continence—but also Instrumental ADLs (IADLs), such as everyday chores and homemaking. For example, if someone over age 65 hires a housekeeper to come by once per week, is that considered long-term care? Most would say no, but conceivably the DHHS statistic includes this form of assistance. Yet, a separate statistic produced by AARP suggests that the lifetime probability of becoming disabled in at least two ADLs, or of being cognitively impaired, is 68 percent for people age 65 and older.2
Another interesting statistic, provided by AALTCI, shows that for people who own long-term care insurance the chance of using the policy falls somewhere between 35% and 50%, depending on the type of policy. Keep in mind that long-term care insurance can only be purchased when someone is generally healthy so if you were to factor in those who were not able to qualify for coverage the overall percentage of people ultimately requiring significant assistance with day to day living would be higher.
Based on a quick analysis of the above statistics it is reasonable to assume that somewhere between 50% and 70% of all people will require fairly significant assistance with the daily activities of living, or even a higher level of care, at some point in their lives.
Of course, statistic about the odds of requiring assisted living do not address another important question: how long will care be needed on average. I address this important question in a separate post you can see here.
1 Long-TermCare.gov. Who Needs Care? United States Department of Health and Human Services. Web. 7 Jan. 2013. http://longtermcare.gov/the-basics/who-needs-care/
2 American Association of Retired Persons (AARP). Beyond 50.2003: A Report to the Nation on Independent Living and Disability, 2003, (Washington: AARP 1 Jan 2005).
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