Five years ago I requested a meeting with my two daughters. At the ages of 22 and 23 that was the only way I could share with them the good news, even though we lived in the same house. They reluctantly sat down on the couch and asked, “what was the great news?” thinking that I would surely announce that we had won the lottery. To their disappointment it wasn’t a lottery win, but rather I announced that I had purchased Long Term Care Insurance for myself. At this point they became slightly annoyed that I had taken them away from much more important things in their lives. I continued to explain that it was for them as much as it was for me. Because of my unselfish purchase it would possibly one day (hopefully not) alleviate the possibility of having them feel any degree of guilt at not being able to care for me if I were unable to care for myself and required help with the key activities of everyday living. Of course I explained the inability to perform some of the activities of everyday living much more graphically than I care to in this piece. Eventually they got the point.
Aging Population a Real Concern
Canada’s population is aging! In 2011 the first wave of “baby-boomers” hit the age of 65. Projections show that by 2056: the proportion of Canadians 65 years and older will more than double to 1 in 4; the proportion of older seniors 80 years and older will triple to 1 in 10, compared to 1 in 30 in 2005. Providing quality care for our nation’s older adults is already beginning to test our healthcare resources.
According to Dr. Anne Doig, a past president of the Canadian Medical Association, “We know that as people age, they require more healthcare services and right now, there is a very real worry that unless it’s significantly transformed, our healthcare system will not be able to meet the needs of future generations.”
This fact is certainly not lost to the five million Canadians who are already serving as family caregivers for older loved ones who need help managing health conditions and the activities of everyday living. Many of these caregivers are members of the baby boom generation, who themselves are turning 65 and are becoming more aware of the need to plan for their own senior living needs.
Caring for Elderly Can Be Stressful
A recent Concerto Marketing Group 2012 Horizon’s Retirement Survey discovered that 1 in 5 pre-retirees expect to financially care for their parents sometime in the future. This report surveyed Canadians between the ages of 45 and 64 who are planning to retire in the next three to seven years. Seventy five percent of elder care was provided by this age group. That also means that 1 in 4 of those providing care to seniors were themselves seniors. Nearly 16% of caregivers were younger seniors aged 65-74, and 8% of caregivers were aged 75 and older. Nearly 6 in 10 caregivers were women (57%). Caregivers have multiple responsibilities. In 2007, 43% of caregivers were between the ages of 45 and 54 the age at which many Canadians still have children at home. Many juggled employment with family and elder care. Many of this age group suffer depression and other stress related illnesses due to the constant demands of caring for an elderly parent(s). Pressures on family caregivers is mounting. The economic impact of elder care is staggering. In 2011, family caregivers spent 444 million unpaid hours looking after someone with dementia, representing $11 billion in lost income and 227,720 lost full-time equivalent employees in the workforce. By 2040 they will be devoting a staggering 1.2 billion unpaid hours per year and this statistic is for dementia only and not taking into consideration, stroke, multiple sclerosis, diabetes, and a litany of other health risks.
A 65 year old today has a very good chance of living to at least 85 years of age and will very likely require some form of long term care. Women will tend to outlive their male partners, and are often left to live alone with few support systems. By the time a woman needs some form of long term care, retirement savings may be significantly depleted through previously caring for her partner. Pensions are significantly reduced, up to 50%, of what was coming into the household while their partner was still living. This fact makes it vital for women to be proactive in long term care planning to ensure that they live all their lives according to their own terms and don’t outlive their savings.
Lack of Preparation for Long Term Care
According to a 2007 Market Probe Canada Survey less than 25% of Canadians, aged 35-75 have factored Long Term Care into their plans, which puts their retirement savings at risk. The Best in Care Long Term Care Cost (2007) reports that the cost of private accommodation in a government subsidized and regulated facility in Canada varies province to province but can be as high as $2,800.00. In today’s dollars, assuming 2% inflation over the last seven years, the cost is approximately $3,100.00. That’s $37,200.00 after tax dollars per year. A privately owned facility can cost double that, or more. According to the same survey, 61% of Canadians aged 35-75 say they are likely to rely on government to cover their long term care costs. However, our rapidly aging population will continue to increase demands on an already burdened health care system. To stay in control of your care, looking for solutions to cover long term care costs, rather than relying on government to provide the quality of care you and your partner would desire, makes good sense. Smart retirement planning calls for a plan that allows us to remain in our home for as long as possible and then progress to quality, facility based care if we need it in the future.
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