Don’t Let Long Term Care Sabotage Your Retirement

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    It’s bad enough that many Canadians have not been saving for an adequate retirement. I cannot stress enough that people need to die with their dignity and not have to find themselves depending on charity.

    If you have made some sort of plan and do have some savings put away then I do applaud you as you are ahead of the game. If you have been studying the economics of Canada you will know that the social services of this country are at its seams and where to find money to support the aging population is becoming quite a challenge.

    Let us consider another factor which can hamper your retirement… Long Term Care. According to statistics, approximately 70% of Canadian will eventually need some form of long-term care. No one wants to discuss the fact they may have to leave their principal home that they have been living in for the last thirty years or so and then have someone clean and care for them in another home, but the sad truth is that day may come for any one of us. OHIP will cover some of your long-term care cost but you must qualify and no one knows if the program will be underfunded. Clients who have saved are in a better position that those who haven’t but what will happen to those have not saved?

    So here is a misconception, if I get sick my family will take care of me. This is a touchy subject for many, as clients many times have different expectations from their children especially if there is already a strained relationship in the home. Clients should sit down and talk from the heart about what is likely to happen. Then there is the aspect of qualified care, medicine to administer as well as bathing and general activities of daily living. There may be no one willing or qualified to attend to the needy.

    One of your options is to buy Long Term Care coverage, however, this coverage is expensive, difficult to obtain and you must pay the premiums until you need the benefit. This type of policy is also not an unlimited amount, so you may have to subsidize the payment. In many instances if you stop paying, all the money will be lost, so even though this is a viable option you still need to weigh it carefully, talk to your advisor about it. Some clients may decide to self-insure for such a time, this means that they will actually save the money and use it when that time comes. A typical solution for many clients could be a reversible mortgage or sell their principal home and use the equity to fund their long-term care and end of life expenses.

    If you are blessed with a ripe old age and need care it might be too late to start talking with your advisor about your options. Planning needs to start early when you can either afford to purchase protection or start a systematic savings plan. Consider the length of life of your parents and your own life expectancy and plan for the longest period of life here on earth.


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