6 August 2019

Income Pressure From Aged Care Costs

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By Michael Rambaldini

Director | Certified Financial Planner | Aged Care Professional

We may spend less in retirement than we did in our working life but care costs can increase as we age. In our 60s we may spend more on travel and holidays, as we enter our 70s our lifestyle spending may reduce but the living costs associated with ageing start to go up as there is a decline in health and independence and often some form of disability may arise.

I have seen this pattern quite often over the years with my clients and their parents. They often require more medical care, additional mobility and disability equipment such as wheelchairs, bed transfer hoists and showering frames.

Medicare and government subsidies will not cover the total costs of aged care.

Careful consideration when planning for retirement needs to include the significant costs associated with ageing.

The traditional way of planning for retirement does not adequately cater for those years of health decline and loss of independence.

There will be an enormous strain on income needs and ultimately quality of life for the later stages of retirement.

The burden then falls on the families.

This is why it’s critical for families to discuss aged care needs of their loved ones before an urgent need arises. Unfortunately, I’ve seen through experience that many families seek advice for aged care needs only after a medical event or necessity. This creates a lot of pressure on everyone.

I really encourage adult children to sit down with their parents to discuss aged care options, before a critical situation arises. It’s also really important to get advice from an accredited aged care professional.

For more in-depth advice on financial planning and aged are costs, please visit our website at www.verante.com.au

The author is an employee of Verante Financial Planning in Castle Hill, Corporate Authorised Representative of Magnitude Group Limited, Licence No 221557, Magnitude Group Limited ABN 54 086 266 202.