The real cost of aged care

August 10th 2017 | Categories: Retirement | Aged Care | | Tags: Aged care |

Australia is an ageing nation. The proportion of the population aged 74 years or over is expected to jump from 6.4 per cent in 2012 to 14.4 per cent in 2060, according to Productivity Commission figures.

This change indicates improved life expectancy in the country (which is great), but it also means you may have to ask yourself an important question about your retirement: Am I ready for aged care?

Get in touch with one of our advisers to make sure you’re completely prepared.

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1. Calculating the costs of aged care

People don’t like to dwell on the idea of potentially needing care when they’re older. However, the reality is that federal government data shows more than 2 million people aged over 70 in the country are reliant on these services.

The My Aged Care website offers fee calculators to help you evaluate the costs of both nursing homes and home care packages as part of your retirement planning. These expenses include:

• Basic daily fees;
• Income-tested care fees;
• Means-tested care fees; and
• Accommodation payments.

However, speaking to a financial adviser can help you identify a tailored plan for your specific circumstances and provide superannuation insights to maximize your retirement savings should you require aged care.

2. Avoid a bad nursing home in Australia

The aged care sector has suffered various media scandals over the last year, so it’s natural to be wary of choosing the wrong facility.

Sadly, a recent KPMG study showed customer service is lacking across many providers.

So how do you avoid a bad nursing home? Try these tips:

• Compare multiple providers;
• Request references and check reviews for each facility;
• Evaluate access to nursing and medical care;
• Check whether leisure and dining services satisfy your needs;
• Prepare a checklist of questions for staff when visiting a home;
• Go with your gut – does the facility feel right for you?

3. Final preparations for aged care

Effective retirement planning should ensure you are financially prepared but are you ready for aged care both mentally and physically? For example, you may need to downsize for aged care in Australia, which is often distressing for people who have lived in a family home for many years.

Your chosen aged care facility should also provide you with a Resident Agreement, which covers the services you’ll receive, relevant fees and your rights and responsibilities. Ensure you have thoroughly read this document and are happy with everything it outlines before moving into a facility.

Lastly, are your family and friends aware of your needs as you get older? This is a difficult conversation, but there may come a day when you’re unable to clearly communicate what you want from aged care and it’s important your loved ones can make arrangements on your behalf.

Contact us for more information on how to prepare for aged care.

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What you need to know

This information is provided by Invest Blue Pty Ltd (ABN 91 100 874 744). The information contained in this article is of general nature only and does not take into account the objectives, financial situation or needs of any particular person. Therefore, before making any decision, you should consider the appropriateness of the advice with regards to those matters and seek personal financial, tax and/or legal advice prior to acting on this information. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relations to products and services provided to you.