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May 7

Do you Know What Care Costs?

By Esther Goldstein

A few years ago, I was speaking with an investment advisor about what he thought people needed in their retirementiStock_000014371816Large-300x213 years. He gave me a figure – I can’t recall what it was – that just seemed very unrealistic – way too low in my estimation, especially if one ends up requiring care or a retirement home. I asked him if he knew what it costs to live in an average retirement home. He had NO idea! I was actually surprised, but I shouldn’t have been. He was a young guy, probably didn’t know anyone living in a retirement home and it likely never occurred to him that he should educate himself about this information. Every time I spoke with an investment person after that, I asked them the same question. 

Do you know what it costs to live in a retirement home on a monthly basis? The only ones that had an idea were those who had older clients who had told them the costs – still, it didn’t seem to be something that they factored in when discussing with the average client, what you needed in your bank account to retire comfortably. I came to realize that beyond investment managers, the average person really didn’t investigate retirement homes or extra costs if  they need care when older.

Most people only start asking the question when they or a close relative need it. For many that is way too late if they haven’t invested or saved over their many working years. If I can give anyone advise early on in their working lives, it would be to start asking financial questions early on. To start thinking about the kind of life you want moving forward and what you can do to get there. Of course, you can never map out your life fully and for most there are bumps and detours in the road over time, but it’s important for people to at least start thinking about savings and retirement when they still have time to work toward saving for it. 

An average retirement home in today’s dollars can range in price from the mid-$2000’s to as much as $10,000/month depending on who owns it, where it’s located and several other factors. And this figure may not include care. 

In some places, we are looking at more for care, and of course for incidentals. Multiply this by the number of years you may potentially live in one of these homes and the figures can be daunting. While right now there is a government pension fund available to all Canadians, it is never going to be enough if you need extra care. 

What about if you want to stay in your home with care? What would the cost be

for that? It depends on what you want in terms of care – live in or live out. And where you live. And what’s available in your community. There are financial products currently that can help with this – long-term care insurance is one of those things. When I looked into it, I found the premiums very high. But if you can’t save enough over time to help with your potential future needs, maybe this is an option to consider for some… This whole topic can be mind boggling for some and may seem way too far in the future to consider for many, but aging is inevitable so this is not something any of us can ignore forever…

As difficult a topic as this is to discuss or consider, it needs to be something more financial and insurance professionals need to educate themselves on and raise with their clients. And it needs to be something we are comfortable opening a discussion about with those we care about.

EGoldstein_4x5_100dpiEsther Goldstein of Senioropolis Inc.

Visit www.senioropolis.com for detailed listings of retirement homes and resources for seniors across Canada.

 

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