Many millennials and Gen Xers are facing a stark reality: their parents and grandparents don't have the means to pay for long-term care
"Many millennials and Gen Xers are facing a stark reality: their parents and grandparents don't have the means to pay for long-term care — and they'll need to help foot the bill, especially since government aid often doesn't cover large parts of this care,
As the population of older Americans grows, so do the financial challenges tied to aging.
Many millennials and Gen Xers are confronting a difficult reality: their parents and grandparents often lack the resources to pay for long-term care. As government aid typically doesn’t cover much of these costs, younger family members are increasingly stepping in to help.
This financial burden can force younger adults to leave their jobs or reduce their working hours to care for aging relatives—sacrifices that can significantly impact their current income and future financial security, including Social Security benefits, experts say.
"The bigger issue is you can create almost a cycle of poverty," said Marc Cohen, a gerontology professor at the University of Massachusetts Boston. "The costs are borne communally, and it doesn’t just impact one generation."
Unprepared for a Predictable Crisis
Long-term care, like other forms of specialized care, is expensive due to the labor and facilities involved. Worker shortages and inflation have driven up prices in recent years, and as the oldest baby boomers near 80, demand is expected to surge further, pushing costs even higher.
Privately funded long-term care, such as assisted living or home health care, is out of reach for much of the middle class. According to a 2023 report from the Harvard Joint Center for Housing Studies, fewer than 15% of people aged 75 and older living alone in major U.S. cities could afford assisted living or daily home health aide visits without tapping into their savings.
"The affordability issue, particularly in the middle market, is what concerns us the most," said Lisa McCracken, research head at the National Investment Center for Seniors Housing & Care.
Government support offers little relief. Medicare does not cover most long-term care, including assisted living and home health care. Medicaid is limited in coverage and often has long waitlists for nursing home care. Assisted living residents who exhaust their savings and turn to Medicaid may even face eviction.
"A lot of people think, 'Doesn’t Medicare pay for this?' It doesn’t," Cohen explained. "People find out late in life that they lack protection against these costs."
The Human Impact
This lack of preparation became a harsh reality for Erika Gilles. When her 78-year-old mother, Karen Proctor, was hospitalized due to chronic kidney disease, Gilles quickly realized Medicare wouldn’t cover her mother’s long-term care needs. Overnight, her mother transitioned from living independently to requiring dialysis and constant care. Pre-existing conditions made private long-term care insurance unattainable.
Gilles found a group assisted living facility and applied for a state subsidy to help with costs. However, if the subsidy falls through, she fears they may have to sell her mother’s home in Sun City, Arizona.
"It’s turned my life upside down and absorbed all of my time," Gilles said. "I don’t think I’m ever going to retire."
Not Just a Boomer Problem
Gen Xers, often sandwiched between caring for aging parents and supporting their children, face financial strain. A study by Nationwide revealed that 56% of Gen Xers financially support either parents or kids. Roughly one-fifth of those caring for a parent reported significant debt or an inability to save for retirement.
A separate survey by Carewell found that 75% of caregivers for both parents and children struggle to save for retirement, and 63% live paycheck to paycheck. According to AARP, unpaid caregiving labor in 2023 was valued at around $600 billion.
Brandon Goldstein, a financial planner at Prudential, says clients often feel the financial pressure of caregiving, which forces them to cut back on saving for their own retirement.
"Having to reduce what you save for retirement puts you at risk of not having assets later on," Goldstein explained. "You may have to depend on your own children for support, effectively continuing the cycle."
A Broader Societal Challenge
Ballooning Medicaid costs may ultimately shift the financial burden of the long-term care crisis to taxpayers. Many older adults lack children or spouses to care for them as they age, leaving Medicaid as their fallback.
This trend is growing as baby boomers age: about 20% of boomer women don’t have children, and those with children have fewer than previous generations. As a result, the strain on public systems will likely intensify.