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Planning for Aged Care

Posted April 10, 2018 by MoneyLink


Aged Care: Will you need it, how much will it cost, and how will you fund it in retirement?

If you’re heading into retirement, no doubt the possibility of needing aged care is on your mind.

It’s just simply a fact of life that we can never be certain of how long we’ll live for. While we hope for independence, good health and a comfortable lifestyle in our latter years, it’s entirely possible that these dreams can come to abrupt and devastating halt if an illness strike, and you end up needing the help of carers.

In this video, Russell Tym of MoneyLink Financial Planners, explains why you need to consider the costs of aged care as part of your retirement planning.

For some people, there may be the option to live at home and take advantage of the many services available specifically designed to help the elderly stay in their own environment: having meals cooked or delivered, mobile libraries, at-home medical check-ups, daily help with personal care, grooming and also housework. However, these services also cost and will need to be budgeted for.

For others it can mean needing a more sophisticated level of care provided by an aged care facility, where there are staff on duty 24-hours, 7-days per week, 365 days per year.

For others, particularly if a spouse dies, aged care facilities can provide a new lease of life, and a place where they feel secure and cared for and can socialise with people their own age.

Aged care can be costly and complex
Of course, without a crystal ball it’s difficult to know what to plan for. The residential aged care industry can be complex, and the up-front fees can be expensive.

Russell Tym says before retirement or early in retirement, it’s worth considering the various aged care options as your ‘Plan B’. Carry on as you mean to but make some enquiries and do some research.

Russsell’s advice is to talk to a financial planner first – this will help you to get a good understanding of how aged care facilities charge, and help you write a list of questions you can go armed with when you visit the places you like. What’s more, if you need to include the cost of aged care in your retirement planning, then you can start earlier to make sure the funds are available when you need them.

Russell says it is wise to compare a few different facilities, understand how they work and what’s required, and then put the idea in your back pocket.

Concerns about the cost of aged care
Last year research by National Seniors Australia found that many retirees are concerned about the costs of aged care and the implications of this for their financial security. All facilities are different and their fees and charges are different.

The important thing to remember is that in our latter years, once we are retired and stop working, we will most likely go through three phases: disability-free years, years with some disability, and then years when we are most likely to be dependent on others for help with activities that are part of our daily living. While women do tend to outlive men (and are therefore generally dependent for longer) genetics, individual health and personal circumstances all play a part.

However, the fact is we are all living longer – and this trend is likely to continue as we have access to better nutrition, health and wellbeing knowledge and medical assistance, and of course as social perceptions of ‘aging’ change too.

No matter what choices you make in your latter years, the only way to get peace of mind over all the ‘unknown factors’ is to make sure you’re financially secure – by being smart with super, making astute financial decisions as well as considered investments, so that in retirement you have enough funds to make choices you’re happy with. A financial planner can help you with all of these.

Russell Tym is an Authorised Representative of MoneyLink Financial Planning Pty Ltd, an AFSL holder.

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