How do I go about aged care financial planning?
We spend most of our adult life working. But our adult life isn’t all about work. We also enjoy using our spare time having hobbies, and spending time with family and friends. And, of course, us Australians love going on holiday.
But how many of us turn our minds to aged care financial planning?
I’ve spent many years working with my financial planner husband. And I’ve spent over 25 years in the financial services industry. I’ve seen many Aussies helping their parents getting into aged care or nursing homes.
But not enough Australians think about financially preparing themselves for aged care.
So, let’s take a look at some things to consider when creating financial planning strategies for aged care.
When to start planning for aged care
This will sound clichéd, but the earlier you start planning, the better. And this is why I encourage people to create a retirement plan. You can always adjust your retirement plan later on, if your circumstances or preferences change.
Your retirement planning may start with having a conversation with loved ones. And then getting relevant advice from professionals, such as your:
- accountant
- lawyer
- financial planner
Types of aged care
When people start thinking about aged care, they tend to think about aged care homes or nursing homes. But they’re not the only options available in Australia.
Home support is also an option that’s attractive to many people. And there’s also retirement villages – an option other people prefer.
So, you should consider the type of aged care takes your fancy when creating your retirement plan.
Calculate your costs
Whatever your preferred aged care option, you need to calculate your costs. While some of these costs may change by the time you retire, it helps to have a ball-park figure to work with. This ball-park figure will help you create and put in place your retirement plan.
Each aged care home sets their own fees. The same applies to retirement villages, nursing homes and home care support. The Australian Government also funds a range of aged care homes and home support. But that subsidy is only available to approved providers.
Other costs to consider are your health costs. You don’t know what health issues may arise for you. But putting aside money to cover health-related costs will make retirement less stressful.
So, it pays to do some research on the cost of aged care. That way, you can be better equipped to put together your retirement plan.
Do I need to sell my family home to move into aged care?
Many people assume that once they move into an aged care or nursing home, they need to sell their family home.
Depending on your circumstances, this may not be necessary. When moving into an aged care or nursing home, there is a means-tested assessment. This assessment determines how much government help you’ll receive. Keeping or selling your home will impact such an assessment.
I therefore suggest you receive appropriate advice before making a decision about this. The benefit of getting advice is gaining knowledge of the pros and cons of keeping or selling your home to move into aged care.
Where to next?
Aged care financial planning strategies can feel overwhelming. This is particularly so when retirement seems a long way off and if you’ve never done one before. A financial planner can help simplify the experience for you and help you reach your goals.
Keen to learn what it’s like to have a financial planner in your corner? Feel free to book in a 15-minute chat and let us help you.
The information provided on this webpage is intended to provide general information only and the information has been prepared without taking into account any particular person’s objectives, financial situation or needs. Before acting on such information, you should consider the appropriateness of the information having regard to your personal objectives, financial situation or needs.
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