Contemplating future independence during the early years of retirement can feel premature, yet it's a pivotal time for considering holistic well-being. While the vigor of these years beckons, health and care concerns loom large in retirement reflections. Some of the most important concerns for retirees across income levels include health and care issues.
Aging in Place
In early 2022, statistics regarding aging in place in Canada highlighted a strong preference among seniors to remain in their own homes or private residences and their communities as they age [source].
In 2011, Census Canada found that approximately 92.1% of Canadians aged 65 and over lived in private residences or dwellings. Aging in place has been a prevalent trend in Canada, with seniors adapting their living situations by seeking support services, adapting their homes, or receiving assistance from family members to facilitate remaining in their own homes for as long as possible. While moving to retirement is not likely a concern for early retirees, they may be dealing with this issue for elderly parents.
Moving to a retirement home involves various considerations to ensure a smooth transition and a comfortable living situation. Here are some important factors to consider:
While the family home might not traditionally be considered a capital asset for retirement, its potential as a tax-free asset sale to fund later-stage retirement or to be used as an asset to fund a move to retirement community is notable.
The carry cost of home ownership such as property tax, utilities, maintenance is something that will not be needed in retirement communities and may offset the cost of retirement community living.
Those Canadians who plan ahead for potential care costs may wish to explore the option of Long Term Care insurance. This policy is most often considered between ages 40 to 70. A unique characteristic of these policies is that they are not based on gender or smoking status.
Premiums, payable for a set duration, vary with age and coverage type. Choosing early presents advantageous rates and coverage levels, offering a shield against future dependencies. These policies, often tax-free, provide monthly benefits, post a stipulated dependency period. Generally, the longer the waiting period chosen, the lower the premiums for this type of insurance. Benefits are paid to those Canadians who can no longer perform “activities for daily living” such as dressing, eating transferring or bathing.
Policyholders may also opt for an additional safeguard—the Return of Premium (ROP) option—assuring estate reimbursement of premiums if left unclaimed.
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All material has been prepared by McKenzie Wealth. McKenzie Wealth is an investment advisor team or Investment Advisor at Richardson Wealth Limited. The opinions expressed in this blog/ video are the opinions of the author and readers should not assume they reflect the opinions or recommendations of Richardson Wealth or its affiliates. Richardson Wealth Limited, Member Canadian Investor Protection Fund. Richardson Wealth is a trademark of James Richardson & Sons, Limited used under license.