Does your retirement plan include provisions for moving into a retirement or long-term care home?
Do you know the difference between the two?
Understanding what these two options offers, and including them in your retirement plan, could mean the difference between an easy and enjoyable retirement for you and your family, or one filled with unexpected anxiety and guilt.
I recently had a couple approach me. They were in the process of caring for her parents, and it was wreaking havoc on their family. Arguments with siblings over who was responsible for care, anxiety over how to afford the care her parents needed, stress over her parent’s health.
Her parents had a retirement plan. They had a fairly healthy nest egg for their golden years and had looked forward to spending their retirement at home, enjoying the fruits of a long working life.
Instead, her mother developed Alzheimer’s, and her father had a stroke that left him struggling to remain independent.
Her family was left scrambling to find care.
They were struggling through subsidy applications, unsure where her parents might end up.
Had her parents planned for a retirement or long-term care living option, it would have saved her family this heartache.
What is the difference between retirement living and long-term care?
Retirement homes are based on a social model. Residents live in homey suites from 300 square foot studios to multi-bedroom apartments and enjoy as much independence as they can manage. Care can include simply helping a resident to manage their medication, up to much higher levels.
Retirement homes are independent, and so cannot be subsidized through the government.
Long term care facilities are based on a medical model. Although there are some social activities, the focus is on offering health and medical care. The interiors tend to be more indicative of a hospital, and residents tend to share suites. There is less focus on independent living, as the care levels start much higher.
Long term care can be subsidized.
How much is retirement living and long-term care?
In retirement living, an independent individual can expect to pay from $2,000-$3,500 per month for a studio suite. This would include meals, weekly housekeeping, and an entertaining itinerary of social activities. A one-bedroom suite might run from $3,500 - $6,500 per month. If two individuals are sharing the space, there is a $800-1,000 cost for the second person. Tenant insurance, phone, cable, and additional care costs are extra. Often, if individuals require more care, they will simply “downgrade” their suite size and “upgrade” their care amounts, so their overall monthly cost remains relatively stable.
In long term care, a “basic” room is $1,900 per month. This includes everything except phone and cable – meals, cleaning, and all costs associated with medical care. A semi-private room is $2,300 per month, and a private suite is $2,700 per month. These costs are mandated by the government.
Is there any financial assistance available to families for retirement and long-term care costs?
Some portion of care offered through the Local Health Integration Network (LHIN) can be applied to retirement and long-term care living. For example, basic care such as assistance with getting up in the morning or showering. These hours would be limited.
Individuals with a disability tax credit certificate can claim a portion of their care on their income tax.
Veterans may be entitled to limited assistance from Veterans Affairs.
Long term care insurance pays out a monthly amount, with few restrictions, towards whatever option family decides is the best.
How can you plan for retirement or long-term care living?
Of course, in an ideal world, we would all be able to live out our retirement years in fantastic health, in our own home, surrounded by friends and family.
But unexpected health issues may crop up that require additional care. You may desire the social atmosphere a retirement home could offer if family moves away, or friends pass away.
Planning for one or both of these living options can provide peace of mind for both you and your family.
Wait lists are exceptionally long for long term care facilities. Recent global health events have doubled and tripled wait times.
Applying for subsidies for long term care homes can be a long and arduous process.
Being able to afford a private care option, such as a retirement home, might help avoid a crisis situation for you and your family.
Even with a healthy retirement plan, long term care insurance offers exactly peace of mind that you will be able to afford to make the choices that are best for you.
The couple that approached me knew firsthand how stressful the process of finding care could be, and they wanted to avoid that stress for their children. They decided on a long-term care insurance plan that cost only $59 per month and would pay out upwards of $2,000 per month should they need it.
That $2,000 per month could go a long way towards paying for a homey studio suite with all the care they need, at a retirement home of their choice, with a much shorter wait list.
The peace of mind was well worth the small monthly premium.
Book a call to discuss how to ensure your retirement plan won’t leave you or your family scrambling for care.