We plan for the purchase of our first home, for our kid’s education expenses and for our own retirement. But when it comes to planning for an aging parent, too often decisions are postponed and avoided until the situation reaches a crisis. But with a little strategy, caring for parents in old age can be managed with less stress and upheaval.
Most seniors want to age in place if possible and the government and health care agencies are encouraging this trend to keep people out of costly long term care facilities. As a result of this push for seniors to remain at home as long as possible, many community supports have been put into place including respite care, home care and adult day care programs. Many of these may be offered at little or no cost through a local community access centre.
There is a good chance however, that a parent will end up at some point requiring more care than is possible in a home setting. Long term care costs are estimated at about $3,000 per month and the average stay is approximately two and a half years. Most people think, “We’ll sell the house to pay for care”. This strategy may end up depleting the savings of a lifetime and still not cover all the costs of assisted living and end of life. Getting old is expensive.
The Canadian Life and Health Insurance Association estimates that it will cost almost $1.2 trillion to provide long-term care to the baby boomers as they pass through old age, and the current funding will only cover about half. The chance of requiring long term care is three in ten by the age 65 and five in ten by the age 75, according to Statistics Canada. Too many overlook this stage of preparation, especially women who live on average five years longer than men.
When planning for old age care, it is important to consider long-term care insurance as well as downsizing and investing. Maximizing the earnings and savings of a lifetime is something both parents and adult children are concerned with and good financial planning can ensure proper care for the elderly while maintaining some of the estate intact to pass on to family.
Each situation is different with a different set of values at play. Open discussion and good early financial planning will take much of the uncertainty out of long-term care planning.
Long-Term Care Costs – planning for living longer
