CNBC- For older adults, perhaps nothing is scarier than the prospect of spending their later years in a nursing home.
More than 1 in 2 adults age 50 and older said they would rather die than live in a long-term-care facility, according to a recent survey from Nationwide Retirement Institute.
The organization took an online poll of 1,462 people in that age cohort from March 25 through April 10.
Loneliness, loss of independence and being without family were some of the major drivers behind their apprehension toward nursing homes, Nationwide found.
In addition, nearly 70% of participants also said that one of their top fears in retirement is out-of-control health-care costs, including nursing home expenses.
They have good reason to worry.
A healthy 65-year-old couple retiring this year can expect to spend $285,000 on health care costs in retirement, including Medicare premiums, copays and prescription drugs, according to data from Fidelity Investments.
And that’s before adding in the cost of long-term care, which runs as high as $102,200 annually for a private room in a nursing facility, according to Genworth Financial.
“A major misconception is believing that you have a plan to cover long-term care expenses and not actually starting it,” said Kristi Rodriguez, vice president of thought leadership for Nationwide Financial.
More than 1 in 3 of the participants in Nationwide’s survey said that they’ve failed to discuss long-term care insurance expenses with anyone.
If nobody talks about it, misunderstandings around managing those costs will persist, said Rodriguez.
“The biggest misconception is that people think long-term care costs will be covered by Medicare,” she said.
Original Medicare may pay some of the cost for up to 100 days in a skilled nursing facility for rehabilitation after a qualifying hospital stay.
The program won’t cover the cost of service if you’re infirm and require a long-term stay in a care facility or if you need help at home with eating, bathing and other activities of daily living.
“You’re going to need more than 100 days of service if you’re caring for older people,” said Rodriguez.
Addressing the need
There are different ways for retirees to address nursing home needs, including using traditional long-term-care insurance or buying life insurance that covers some care benefits.
Regardless of how you tackle this problem, talk with your family members and work with a financial adviser to draw up a strategy.
Rodriguez of Nationwide has three questions to jump start the discussion with spouses and relatives:
1. Where do you see your future? Retirees may spend their early years traveling, but they tend to slow down as they age. If you’re having this conversation with a spouse, think about the lessons you might have learned by watching your parents or grandparents age. What would you do differently?
2. Where do you want to be? This question helps people address the concept of where they want to age: Do they see this happening at home? Do they expect to get care in an assisted living facility? Three out of 4 of the people polled by Nationwide would rather receive care at home.
3. Who will help to provide care? Be honest if you envision your children or your spouse providing care should you remain at home. Caregivers who are still working could see their wages and retirement savings take a hit.
“There’s also the indirect cost of family strain,” said Rodriguez. “Families need to talk about it.”