One of my favourite quotes is one that impacted me the first time I read it several years ago – and it continues to impact me to this day. It reads, “Don’t regret getting older. It’s a privilege denied to many.”
This is the kind of quote that for many people, brings perspective instantly. Every day is TRULY a gift. As with just about everything, though, living longer comes with a financial cost, and in order to enjoy each day as much as we can, it’s important we’re prepared for it as best we can be. With this in mind, the following are five healthcare costs you need to consider when planning for your financial future.
1.The Cost of Private Homecare
It’s a risky proposition to bank on qualifying for government-funded homecare. Quite simply, not everyone qualifies, and for those who do, they might not qualify for the number of hours or level of care they want or need. And, your need for homecare – or your need for a significantly higher level of care – could literally change overnight if you suffer a stroke or other serious health event. Assuming an hourly rate of $35 for a personal support worker, it could cost more than $100,000 annually to have in-home care for eight hours each day.
2. The Financial and Emotional Cost to Family Caregivers
Do you anticipate needing to rely on a family member or other loved one to provide you the care you might need in the future? If so, you’re not alone. According to Statistics Canada[1], one in four Canadians aged 15 or older provides care to a family member who has a long-term health condition, disability or age-related concern. Of that, almost half reported caring primarily for parents or parents-in-law. This comes with a clear financial cost (including potentially lost wages and missed career opportunities) but it also comes with an emotional toll. Loved ones have other responsibilities too, and can find managing it all financially and emotionally overwhelming.
3. The Cost of Renovating So You Can Age at Home
Most retirees identify the ability to age at home as a top goal. A 2020 National Institute of Ageing (NIA)/TELUS Health Survey found that 91 per cent of Canadians of all ages, and almost 100 per cent of Canadians 65 years of age and older, report that they plan on supporting themselves to live safely and independently in their own home as long as possible.[2] The average cost of a basic, aging-in-place remodel that includes bathroom safety supports and a stair lift can range from a few hundred dollars up to more than $25,000. You need to give thought in your planning to whether this is even feasible.
4. The Cost of Private Residential Care
The cost of private residential care varies widely, depending on the location and the level of healthcare or assisted living service needed. And it can be significant, ranging from $2,500 to more than $10,000 per month.
5. The Cost of Living Longer
Statistically speaking, Canadians are living longer than ever before – and for an increasing number of us, we’re living MUCH longer. The number of Canadians living to age 100 and beyond reached a record high in 2021, and it’s not because of population growth. In 1971, five out of every 100,000 Canadians were 100 or older; in 2021, that proportion rose to 26, according to Statistics Canada.[3] Ideally, your financial plans and investments should meet your needs for your entire life.
This all might sound daunting but as with everything else, proper planning can help ensure that you’re prepared for what life might bring, and for what you’re going to want and need in your retirement. If you work with a financial advisor, you’ll have the benefit of expert guidance and advice to help you along the way. For more information, please call.
Charlene Rehn, CFP
Insurance Representative, Wiegers Financial and Insurance Planning Services ltd.
Financial Planner, Manulife Securities Investment Services Inc.
Source: Five health care costs to consider in your financial and retirement plans, RBC Wealth Management, https://www.rbcwealthmanagement.com/en-ca/insights/five-health-care-costs-to-consider-in-your-financial-and-retirement-plans
The opinions expressed are those of the author and may not necessarily reflect those of Manulife Securities Investment Services Inc.
Mutual funds are offered through Manulife Securities Investment Services Inc. Insurance products and services are offered through Wiegers Financial and Insurance Planning Services Ltd. Banking products and services are offered by referral arrangements through our related company Manulife Bank of Canada. Please confirm with your Advisor which company you are dealing with for each of your products and services.
[1] Differences in the characteristics of caregivers and caregiving arrangements of Canadians, 2018, Statistics Canada, January 14, 2022, https://www150.statcan.gc.ca/n1/daily-quotidien/220114/dq220114c-eng.htm
[2] Dr. Samir K. Sinha MD, DPhil, FRCPC, AGSF, Almost 100 per cent of Older Canadians Surveyed Plan to Live Independently in their Own Homes, But Is This Even Possible?, National Institute on Ageing, October 13, 2020, https://www.nia-ryerson.ca/commentary-posts/2020/9/22/almost-100-per-cent-of-older-canadians-surveyed-plan-to-live-independently-in-their-own-homes-but-is-this-even-possible
[3] A portrait of Canada’s growing population aged 85 and older from the 2021 Census, April 27, 2022, https://www12.statcan.gc.ca/census-recensement/2021/as-sa/98-200-X/2021004/98-200-X2021004-eng.cfm