Today’s Safety Net
PROTECTING YOUR family against financial disaster is vitally important. But it isn’t cheap—and many folks aren’t doing an especially good job:
- Just 44% of U.S. adults say they have enough emergency savings to cover at least three months of living expenses, according to a Bankrate survey. Meanwhile, Bankrate also found that just 41% would pay for a $1,000 emergency with savings, while 43% said they’d borrow to cover the cost.
- A Federal Reserve study was similarly bleak: It found that just 63% of Americans said they would use cash to cover a $400 financial emergency, while others would resort to other methods, such as borrowing from family or putting the expense on a credit card and paying it off over time.
- Almost 49% of Americans receive health care coverage through an employer, 21% from Medicaid, 15% from Medicare, 6% through individual policies and 8% are uninsured, according to 2023 data from the Kaiser Family Foundation.
- Households headed by a 65-year-old can expect average out-of-pocket costs for medical and long-term-care services of $67,000 over their remaining lifetime, according to a 2022 study by Boston College’s Center for Retirement Research. This $67,000 is on top of what retirees pay in regular insurance premiums. Meanwhile, a 2017 study by the Center found that out-of-pocket medical costs devour 18% of the average retiree’s income. This excludes long-term-care costs. For 6% of retirees, medical costs eat up more than half of their income.
- Genworth’s 2023 Cost of Care Survey puts the average annual cost of a semi-private nursing home room at $104,025. You might pay $136,875 in California, $118,625 in Florida and $167,718 in New York, but just $63,875 in Texas. Nursing homes in big cities tend to be especially pricey.
- Cash-value life insurance accounted for 60.5% of new policies sold to individuals in 2023, vs. 39.5% for term insurance, according to the 2024 Fact Book from the American Council of Life Insurers. Term insurance is far less expensive and typically the best bet for individuals, and yet cash-value policies continue to dominate new sales.
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