We have to know in advance how we are planning to fund our care!
Maybe we need to approach our care-years planning as we do our retirement planning. Envision what we want it to look like and working backwards from there, put appropriate financial plans in place for when we reach that time
Whether single, widowed or divorced (i.e. solo), a married boomer or a senior couple, every Canadian adult should have a plan as to how she/he is going to be looked after should they need 'significant help'
Long-term care expenses are the single largest out-of-pocket cost for persons over 60
Patty was a guest speaker at a Nicola Wealth Management Group Client Seminar and shared the podium with host John Nicola. Watch this video of John’s presentation on “Reverse Mortgages and Insured Annuities” as options some families may consider
Whether delivered in our own homes, in our children's homes, in assisted living retirement communities or in nursing homes, we have to
expect to pay for that care... somehow
There are no easy solutions, no magic-bullets
These are our options if we want quality care in our future:
If our family is wealthy, we can self-fund our expenses (click here to read a CIBC Report on Tax Free Savings Accounts as a Retirement Vehicle)
If we have personal savings and assets and aren't concerned about protecting our children's inheritances, we can access these (click here to read a 2009 BMO Report ‘Saving for Retirement in Canada’ -- Questions you need to ask yourself to figure out how much you need to save for your retirement)
If we feel financially secure with guaranteed monthly incomes from annuities we can use these (click here to read a column on annunities posted by Gordon Pape, financial advisor) If we feel financially secure with guaranteed monthly incomes from pensions, we can use these (click here to read An RBC Report 2010-from the Retirement Research Center, by RBC and University of Waterloo, on what Canadians expectations about their pensions )
(Click here to read an opinion on life annuities and long term care)
If we own our mortgage-free home, we can obtain an advance on its value as a reverse mortgage and use these tax-free funds. (Interest accumulates; the debt doesn't need to be paid until death, sale of the house or upon moving) (Click here to read what CHIP has to say about reverse mortgages and HELOCs)
(Click here to read an article by The Care-Guide on reverse mortgages)
If we have whole or universal life insurance policies, we may consider these. (With whole insurance, we could cash-in the policy ending coverage or loan against it to access funds, realizing the death benefit decreases. With universal life, we might use the savings component or the policy as loan collateral)
If we have workplace disability insurance (DI) coverage and are unable to do our jobs, the prescribed monthly benefits can be used
If we own a critical illness (CI) insurance policy, we'll receive a lump-sum cash benefit if diagnosed with any of the listed illnesses;
this sum can be used as wanted - (Click here for a quick description of CI)
(Click here to read how ‘Critical Illness Insurance’ became an important insurance staple around the world because of the Drs. Christian and Marius Bernard, famous brothers)
Watch this 3 minute video of Patty interviewing Pamela Yoon Drakos, Financial Planner, on the need for financial advisors to discuss more than wealth accumulation with their clients, to also include important conversations on 'aging and care' -- recorded April, 2011
If we've purchased a long-term care are insurance policy (LTCI) we would use this is a specific kind of insurance which provides stated daily, weekly or monthly benefits 'to cover the costs associated directly with care'.
For more information on long-term care insurance, browse this website's special section on LTCI.click here
We can rely on available provincial government programs (Remember, home-care and nursing home services are included in our
Canada Health Act as an 'extended health service' and, as such, are not and never have been 'a medically necessary' insured service. Thus, these types of services aren't guaranteed in the same way as hospital and doctor services are, but are provided 'at the discretion of each province' for more information on this topic, click here)
Note: Viatical settlements aren't available, they're illegal in most provinces (i.e. a terminally ill person who owns a life insurance policy sells it to a third party, which agrees to pay the premiums and pay the insured individual an amount less than the policy's value)
We can hope for an inheritance Click here to read a Manulife Investment Report on “When an Inheritance Comes Your Way” To read a CIBC report on ‘Three Generations Under One Roof’ which outlines what to consider, click here
Estimated Total Value of Inheritances for the 10 years ending in 2010
Fact is, even if you are part of a couple now, there's a strong likelihood that you will find yourself single at some point during retirementClick here to read “A BMO Retirement Institute Study” on Solo Retirement
43% of Canadian seniors are single
You are looking for Part One of Dr. Ken Dychtwald’s speech at the 2010 Joint convention at the American Society on Aging ....
Dr. Ken Dychtwald, one of the world's leading experts on aging tells us we have been given a 'longevity bonus' and he calls that 'a real triumph'...but then he goes on to ask, 'who is going to pay for that when confronted with our growing aging demographic'
Watch a part of a profound, thought-provoking speech, by Ken Dychtwald, Ph.D. (gerontologist, psychologist, documentary filmmaker and author) as a keynote speaker at the 2010 joint convention of the American Society on Aging and the National Council on Aging rages against unpreparedness for the aging of our society. Note: from Patty --I believe we as Canadians can also learn from what he has to say