Suze Orman: A Huge Retirement Cost You Could Be Underestimating
Written by
Nicole Spector
Edited by
Molly Sullivan
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You may be confident that you’re on track to live your dream life in retirement — or at least manage a comfortable existence. You have the retirement plan well funded with at least 15% of your annual income, you’re managing credit cards to avoid accumulating high-interest debt and you’ve thought about where to live and whether to downsize. Things are going smoothly, right? Perhaps not.
In a recent blog post on her website, financial guru Suze Orman discussed a key retirement need that many people don’t account for when planning their retirements. That need, which is all too common, is for intensive care as you age. According to a 2023 study by Guardian Life, 41% of older adults require caregiving. That percentage is expected to skyrocket as life expectancy increases.
More Than Half of People Over 65 Have Intensive Care Needs
Developing physical mobility limitations is a major possibility; it happens to about 35% of persons age 70. Cognitive decline, however, is even more prevalent. Orman pointed to a recent analysis from the Center for Retirement Research at Boston College that found that more than half of those ages 65 and older will have intensive care needs — needs associated with the activities of daily life — as a result of cognitive decline.
“For 14% the need for intensive care will last less than a year, for 20% it will last between one and three years, and for 18% the need will be for more than three years,” Orman wrote. “And women are at greater risk. The 52% probability of needing major care breaks down to 46% for men and 56% for women.”
Planning For Intensive Care Needs in Retirement Is Critical
It’s difficult to absorb this information without feeling uneasy. It can be triggering, because we likely all know at least one loved one who has needed routine intensive care. It can also be depressing, because if we’re currently cognitively sharp and able-bodied, we can’t precisely imagine what life would be like without having such privilege. But the odds here just aren’t in our favor. We need to financially prepare for intensive care needs in retirement. Medicaid does not cover services such as assisted living.
“Can you save more today to have more money later to hire professional help when needed?” Orman wrote. “Or what about moving to a community that offers some support, if needed, as you age? And I always recommend thinking through the potential huge value of long-term care insurance (LTCi). My go-to expert for LTCi is Phyllis Shelton at gotltci.com.”
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