Long Term Care products aren’t new. However, many people still don’t understand the benefit of these solutions. We’ll try to demystify long-term care in this short 3-part series. In this article we’ll discuss why it’s important to include long-term care in your financial plan. In Part II of the LTC series, we’ll talk about some of the major causes of dependence, and finally in Part III we’ll discuss some of the solutions currently on the market.
According to the New England Journal of Medicine “50% of individuals aged 65+ will require long term care in their lifetime”.
That’s a very troubling statistic. Most Canadians fail to realize that financial planning, retirement and healthcare are all inter-related. Just as a disability can impact the accumulation phase of one’s savings plan pre-retirement, an illness or long term care expenses incurred during retirement can also erode one’s lifetime savings.
The reality is in retirement if you suffer a loss of independence you will have long-term care expenses. If you haven’t adequately segregated money for long-term care, it likely will be coming from your nest-egg. Withdrawing funds from your RRIF to cover the costs of health care isn’t an option most retiree’s are likely to happily except.
That is why you have to start getting preoccupied with long-term care and asking your planner to ensure that long-term care becomes a major part of your total retirement program. If you’re 50-70
years old, thinking about or nearing retirement now’s the time to consider your options.
Stay tuned for Part II of our LTC series where we’ll go over many of the causes of dependence in depth.