Not surprisingly, “how much money will I need to retire comfortably” and “is it possible I could outlive my savings” were the top responses among Baby Boomers who were asked to select their top three “burning questions,” but another important issue was also on their minds.

And that is the issue of long-term care, according to the latest findings from Northwestern Mutual’s 2024 Planning and Progress Study.

Perhaps because of their proximity in age to retirement, Boomers included long-term care concerns among their top three burning retirement questions – the only generation to rank the risk so highly.

• How much money will I need to retire comfortably? (34%)
• Is it possible I could outlive my savings? (31%)
• How can I plan for potential long-term care needs? (28%)
• How will taxes impact me in retirement? (28%)
• What if inflation rises when I’m retired? (26%)
• How should I budget for healthcare expenses? (24%)
• Will Social Security be there when I qualify for it? (20%)
• Will I have enough to leave behind for loved ones or charitable causes? (15%)
• What if the stock market drops when I’m retired? (14%)
• None (17%)

These findings come as the Boomer generation reaches their 60s and 70s, and the financial risks associated with a long-term care event become more likely. In fact, 70% of adults who live to age 65 will experience a long-term care event during their lifetime, the study notes.

Further underscoring their concern of long-term care events, majorities of both Gen X (63%) and Boomers (50%) believe it’s “likely or highly likely” they will need to provide long-term care for themselves eventually. Many also believe it’s likely they will need to provide care for a loved one.

Yet, despite this widespread awareness of long-term care events and the potential impact, far fewer older Americans say they have planned for the possibility they will need to provide care for themselves or a family member.

When asked whether they’ve planned financially for the possibility that they’ll need to provide long-term care for themselves or a loved one, only about a third of Gen X (36% for themselves; 31% for a loved one) and Boomer respondents (40% for themselves; 28% for a loved one) indicated that have done so.

Retirement Income

Meanwhile, nearly 60% of future retirees (58% of Gen Xers and 64% of Boomers) think they will need a paycheck in retirement that’s as big or bigger than what they receive today to live comfortably. Only around a quarter (27% of Gen Xers and 25% of Boomers) believe they will need less to retire comfortably.

At the same, more than half of Gen X respondents (51%) indicate their retirement savings are just three times larger than their annual income or less – while many financial experts recommend saving approximately 10 times an annual salary or more before retirement.

“For millions of Gen Xers who are fast approaching 60, the difference between retiring on time and feeling comfortable or working longer and lowering retirement expectations will come down to financial planning,” emphasizes Kamilah Williams-Kemp, chief product officer at Northwestern Mutual. “It’s never too late to take action, but the challenge and the stakes rise the longer people wait.”

Williams-Kemp further observes that by not accounting for long-term care, people are left vulnerable. “On the other hand, planning in advance for a long-term care event is the best way to ensure that someone’s wishes to age gracefully are followed and funded,” she adds.

The study was conducted from Jan. 3–17, 2024, by The Harris Poll on behalf of Northwestern Mutual among 4,588 U.S. adults.

The retirement income and cost of long-term care portion of the study are available here.

Read more @napa