Getting old is a fact of life, and whether we like it or not, plans must be made for how we’ll be looked after as we grow older and require greater support. Too many Australians don’t allow for aged care services in their financial plan. Even so, when crisis hits, there are still important decisions to make which can make the difference between a sustainable and appropriate plan and financial stress. Given more than 1 in 2 Australians will access aged care services in their lives, and the cost of aged care is on the rise, it is essential to understand the options available, how they may impact you or your elderly relatives, and how this fits into a sound financial plan.
Aged Care – Understand Your Options
Careful and considered planning for aged care takes into account the various options. These include home care, which allows individuals to receive care in their own homes, residential care, which involves living in a facility that provides 24-hour care, and respite care, which is temporary care to give a caregiver a break. You may also consider retirement villages or other private facilities, which offer primarily lifestyle benefits or unique care services and do not benefit from government subsided care. Each of these options comes with its unique set of benefits and drawbacks, and caters to people depending on their care requirements, so it’s critical to ensure your plan considers the option best suited to your needs and budget.
It’s also important to understand that not all aged care facilities and services are created equal or are suited to all individuals. Some facilities focus on specific illnesses, such as dementia, some on particular community groups such as country of origin or religion and other niches. Further, in December 2022, a Star-Rating system was brought in to assess aged care homes, giving them a rating between “Significant Improvement Needed” (1 star) to “Excellent” (5 stars). You can find more information on Quality in Aged Care by clicking this link.
For help with these care and lifestyle choices, there are independent professionals who can understand your non-financial needs and present choices. We encourage our clients to use these services and have previously worked alongside them to create a coordinated financial plan.
Planning Ahead for Aged Care – A Non-Negotiable
You may know of someone who has lost the capacity to make decisions for themselves and requires the intervention of family or loved ones to place them in care. This can get particularly tricky where that person may have once had an idea of the sort of care they would like to receive (should the need arise) but hasn’t documented or expressed with an adviser. When it comes to planning ahead for these situations, often your financial adviser is the key person in your corner, assisting with decisions and plans for aged care solutions. They take the time to understand your unique circumstances, project the associated costs, and help you make the right choices for your unique circumstance.
When it comes to financial planning for aged care, one of the key considerations is cost. The cost of aged care can be significant, and it’s important to factor these costs into your financial plan. The Australian Government provides support in some circumstances, but fees charged by aged care providers and facilities can vary. There is a basic daily care fee and accommodation fees and may be a means-tested care fee and additional services fees if you choose to live in a residential care facility. It’s important to understand these fees and how they are calculated, as well as any subsidies, efficiencies or support available.
Aged Care and Your Assets
Another important consideration is the impact that aged care can have on your assets and income. Depending on your financial situation and care needs, you may be required to contribute a significant portion of your income and assets towards the cost of care. This can impact your ability to fund your care and lifestyle as well as that of your spouse or other financial dependent. Further, it may impact the inheritance you wish to leave behind. Your financial adviser can help you understand the potential impact of aged care on your assets and put appropriate plans and protections in place to achieve the best outcome.
Other Aged Care Considerations
It’s also important to consider the emotional and social impact of aged care. Moving into residential care can be a significant adjustment, and it’s important to consider the impact this may have on your mental and emotional wellbeing.
Helping a loved one access care can also be extremely stressful. The stakes are high and often there are competing family opinions. Documenting your preferences beforehand can relieve some of this stress for your family. Having a financial adviser guiding during the entry process can mediate between conflicting family voices and give surety that decisions are optimal.
Additionally, staying socially connected can be challenging in aged care, so it’s important to seek out opportunities to maintain connections with loved ones and participate in activities that bring you joy. These factors and more should always be considered when planning for your future aged care requirements.
Priority AG – Looking After You
Navigating the complex aged care system and its costs, options and impact on your financial situation is something that the average Australian simply doesn’t have the time or experience to do well. This is where Priority’s Aged Care service comes in. Our specialist advisers give you the tools, knowledge and confidence to make informed decisions that align with your needs and preferences, as well as your current and future care requirements. This is then incorporated into your overall financial plan, making sure you’re in the best position to fund the aged care services you require in the future.
You can contact our specialist Aged Care advisers on 02 9415 1611, or via our website.