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Why Planning Ahead for Caregiving Costs Can Save You in the Long Run

Apr 29, 2022 | Caregiving, Planning

Planning for your financial future and retirement is an exciting process. You probably have a list of things in your mind that you would like to save for, including places you want to go, sites that you want to see, and experiences you want to have. The good news is that you can arrange for a satisfying retirement with adequate planning, smart investing, and expert financial advice. This includes planning for what can’t be planned.

One of the main reasons financial goals are not achieved is the failure to account for the unpredictable. If world events show us anything, it’s that life is full of surprises, and while we cannot predict them all, we can make flexible plans to help cushion the unexpected.

Consider The Unexpected

Over the next decade, Canada will see a shift in demographics. Nearly 25% of the Canadian population will be over 65, which will bring a host of changes along with it. This shift will have implications socially and economically for the country, especially when it comes to the healthcare system. On an individual level, it sparks the need for pre-retirees to have conversations about their future health. It’s prudent to think ahead about possible healthcare spending needs.

In the event you or your spouse are impacted by an unexpected illness or accident, do you have a plan to cover the medical costs? What happens when one of you needs home-care attention or needs to move to a care home? More and more Canadians are beginning to discuss the potential cost of healthcare in their futures and exploring the options available to them in their communities. These conversations aren’t as exciting as travel plans, but they are just as important for your future comfort and happiness.

The Economic Impact of Caregiving

It’s no secret that the impact of caregiving falls disproportionately on the shoulders of women. This is not to say that caregiving is only the responsibility of women; however, trends show that it is women are still more likely to provide care for family members, leave their jobs to provide care, and require care themselves as women outlive men more often.

When women leave the workforce to provide care for their loved ones, they are not only leaving paid employment to provide unpaid care. They are also losing opportunities to accrue wealth and potential investments. With less revenue to invest for their own retirements, women have fewer finances to rely on when it comes time for them to retire. With nearly ⅔ of long-term care residents in Canada being women, these are troublesome statistics. Adequately planning ahead for the financial cost of health care is essential for individuals and simultaneously eases the burden on women in your life who may end up being caregivers or requiring care.

Exploring Care Options

When sitting down to make a health care budget for your future, it’s helpful to begin by exploring the various care options available in your community. In Canada, most caregivers are family members, with nearly one-quarter of all Canadians over the age of 15 identifying as a caregiver in their families. While family support is a wonderful thing, it may not be realistic for everyone to count on, nor expect around-the-clock. Outside help can not only give your loved ones much-needed respite, but it can also help you in the event that you need professional support.

Many Canadian cities and towns will have different options for health care support. There are usually home-care options that are both publicly funded and privately funded. The cost of at-home supports will vary, depending on where in Canada you live, but it can cost upwards of $250,000 if needed 24/7. Other, more affordable options can include care-homes, retirement homes, and assisted living options, depending on the level of support required. Once you decide on what feels right for your future, talk to your financial planner about creating a health fund alongside your retirement portfolio. We also recommend discussing your desires and plans with your loved ones so everyone stays informed and at ease.

Create a Comprehensive Retirement Plan

Retirement planning includes several moving pieces, with each strategy requiring different rules. Working with a professional wealth management advisor can help you set clear goals to retire with financial ease. At Regan Schiller & Associates, we’ll help you create a detailed plan and suggest strategies to meet your goals.

This is a general source of information only. It is not intended to provide personalized tax, legal or investment advice, and is not intended as a solicitation to purchase securities. Regan Schiller & Associates is solely responsible for its content. For more information on this topic or any other financial matter, please contact an IG Wealth Management Consultant.