Caregivers: beware of eroding your net worth

Scott and Fran are a hard-working couple with elderly parents and grown children. Their careers were at a high point when Fran’s mother suffered a devastating stroke. Suddenly, they found themselves juggling roles again as they had when their children were young, except this time around, it came without warning or time to prepare.

Fran’s mother needed long-term rehabilitation and they were considering assisted living for her father whose health was also failing. However, Fran’s parents had little saved for health expenses. With Fran and Scott nearing retirement, they couldn’t afford to help financially or work less. The family felt overwhelmed and didn’t know the answer to: “what do we do now?”.

Even though no one likes to think about needing long-term care, the reality is that many people will need it at some point in their lives. In addition to the physical and emotional toll, long-term care can quickly deplete a lifetime of savings.

There’s a widespread belief among Canadians that government programs will cover healthcare costs. Although many long-term care facilities and home-care services receive public funding, most also charge co-payments or extra fees for additional services that aren't offered under the long-term plan.

As an example, nursing homes typically provide the highest level of support and some are publicly funded. Still, the number of nursing home beds is limited and waitlists are often long, especially for government-subsidized spaces. Seniors residences typically provide less intensive services than nursing homes and are generally paid for out of pocket, with monthly fees ranging from $1,500 to $5,000 and higher on average.

How you choose to address the long-term healthcare needs for yourself and your loved ones is based on your individual situation and personal preferences, ability to pay and the availability of services. Most important is that you start the preparation process well ahead of time and build contingencies for long-term care into your wealth plan.

Caregiving can be costly for the person needing the care as well as for loved ones who may be looking after them. You may need to take a pay cut if you’re working less to provide care and in terms of expenses, you may spend more on things like food and transportation. You want to ensure that you’ve adequately accounted for both anticipated and unexpected caregiving-related costs so that you don’t need to dip into your other savings or compromise other financial goals.

After all, the goal as we age is to continue to enjoy choice, control and independence in life. To do so, it’s vital to factor healthcare costs into your future. Contact us today to learn more about avoiding the situation Scott and Fran’s family found themselves in by incorporating caregiving solutions into your overall wealth planning strategy.

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