BY FAZAAD BACCHUS
Over the next thirty years a large segment of the Canadian population will be heading into retirement. Even though a new study shows that as of this year the number of millennial has surpassed the Baby Boomers we still have a crisis ahead of us. As a result of medical advances and lifestyle changes retirees are now living longer and leading more meaningful lives. In 2000 the life expectancy for the average male was 77 years where in 2010 life expectancy is now up to 83 years of age, for women that figure is even higher as women naturally tend to live longer lives.
What does this mean for the Government’s Social Services; it means that there is a longer time that the government will be paying benefits, albeit there is a cap on these benefits. It’s already an issue for the government to fund its OAS programs as the projection shows that by 2025 there will only be 2.84 working adults to provide for senior’s benefits, down from 4.46 in 2010. However, another issue is looming clear, health care costs for retirees will account for 97% of total available revenues up from approximately 44% currently today. This is an astronomical figure.
In your retirement years the possibility of an illness causing you to require Home Care would be a challenging one. Loss of independence will require an influx of money as statistics show that a man in a state of dependency for approximately 3.5 years will require at least $100,000 to cover his needs and a woman in a state of dependency for six years approximately $185,000. Statistics show that percentages of the population by age group who will experience loss of independence are 12% between ages 65 to 74 and 27% from ages 75 to 84. After age 85 these figures grow even more drastically to 57% who will lose their independence existence.
If you were back home in the West Indies there might have been a family or neighbour to take care of you, but not so in Canada. Everyone here works to earn a living so taking care of an elderly person is physically, psychologically demanding. Not because they do not want to care for you but simply cannot afford to, with mortgage payments, kid’s school costs and car payments, life is a constant grind.
So ask yourself three simple questions if you should lose your independence. Would I be a burden on my children or those at home? Would I be able to afford the level of care I deserve? Would I have to depend on the Public Health Care system?
Well the choice is in your hands and you have three options available to you. Home Care which can easily add up to between $2,500 and $5,000 per month, this includes your meals, a nurse at home etc. Should you choose a private long-term care facility, it will cost you anywhere from $1,800 per month to $5,000 per month. Or if you choose a government-run subsidized facility it will cost you anywhere from $1,800 to $3,000 per month.
As you can see any of these choices will cost you money, money which you may not have. However, you can plan for this delicate period of your life by including Long-term care insurance as part of your overall Financial Plan. In the event you are unable to perform two or more of your activities of daily living you can qualify for a monthly benefit which will help to ease your financial strain and stress on your family. Kindly discuss this option with a qualified financial advisor.