Have you planned for Aged Care in your retirement?

Written on the 31 August 2021 by Parkside InvestorPlus

In my previous articles about retirement planning, I’ve spoken about the importance of getting yourself ready for retirement before you retire, for example, having a test running your retirement prior to the actual event.

And I’ve written about how much in your superannuation you will need to retire comfortably.

So, while we talk about living out your best years in retirement whether it be travelling, new hobbies, spending time with grandchildren or doing all those jobs around the house that you’ve been putting off (and didn’t get done during the “stay at home” orders) – there is one aspect of retirement that is seldom talked about and that is – being financially prepared for your older age (aged care).

In a recent survey of 5000 respondents, only 14% of those surveyed said they were financially prepared for their aged care needs in retirement.

What is aged care?

As you get older, often it becomes more difficult to do things on your own.

For example, you may need help with cleaning, health problems or even just moving about.

Aged care is the support provided to older people who need help in their own home or who can no longer live at home.

Examples of aged care include;

• Help with housework, shopping, cooking or just going out
• Any assistance with mobility such as walking frames or motorised scooters
• Modifications to the home to assist with mobility such as ramps, handrails or even stair lifts
• Personal care – dressing, eating, bathing, going to the toilet
• Health care – nursing, physio, and medical care
• And of course, accommodation if living in your own home is no longer an option

Just from the list above, you start to understand that there are costs associated with each of these aged care requirements.

It’s vitally important to ensure that the right amount of aged care costs have been factored into your later life financial planning.

Unfortunately, though, as we’ve seen from the critically low number of Australians who are financially prepared for aged care, the vast majority will fall short.

The reasons for this can be many such as;

• Negative media surrounding nursing homes – certainly both the Royal Commission and the pandemic has exposed the vulnerabilities of aged care facilities
• Simply denying the fact that aged care will be a need at some later point in your retirement

Why is aged care important?

Proper and prudent aged care financial planning will ease the burden on both you and your family when the need arises.

Additionally, aged care can help you with:

• Staying connected with your community
• Maintaining some level of your independence
• Supporting your health, safety, and overall wellbeing

So, whether you chose to stay in your own home or move into an aged care facility or even in the event of short term care such as after hospital and respite care, planning for the inevitable before you transition into retirement will make it all the more less stressful for all.

The key takeaway here is to start planning early for aged care, as difficult and unwanted as it may seem.

At Parkside InvestorPlus, we have a specialist Aged Care adviser and we look at your retirement planning holistically to ensure you enjoy your retirement with peace of mind and knowing that you will be looked after in those later years.