Retirement & Financial Planning Report

A Congressional Budget Office report says that the need for long term care will increase sharply in coming years due to changing demographics, the latest prediction indicating that persons in their middle and later career stages should be thinking about how they would pay for such services.

By 2050, CBO found, one-fifth of the total U.S. population willbe 65 or older, up from 12 percentin 2000 and 8 percent in 1950. The number ofpeople age 85 or older will grow the fastest over thenext few decades, constituting 4 percent of thepopulation by 2050, or 10 times its share in 1950.

ADVERTISEMENT

"That growth in the elderly population will bringa corresponding surge in the number of elderly people with functional and cognitive limitations.Functional limitations are physical problems thatlimit a person’s ability to perform routine dailyactivities, such as eating, bathing, dressing, payingbills, and preparing meals. Cognitive limitationsare losses in mental acuity that may also restrict aperson’s ability to perform such activities," it said.

CBO said that on average, about one-third of people age 65 or older report functional limitations of one kind or another; among people age 85 or older, about two-thirds report functional limitations.

"One study estimates that more than two-thirds of 65-year-olds will need assistance to deal with a loss in functioning at some point during their remaining years of life. If those rates of prevalence continue, the number of elderly people with functional or cognitive limitations, and thus the need for assistance, will increase sharply in coming decades," it said.