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Funding long-term care costs – the retirement issue we aren’t talking about

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By Mike Jaczko, BSc Phm, CIM® and Max Beairsto, B.Sc. Pharm., MBA, CVA

Over the past several years we completed a plethora of strategic wealth plans for pharmacy owners contemplating retirement. As people age, the likelihood of requiring some form of supportive care either at home or in some kind of long-term facility increases. It’s a reality that’s growing and cannot be ignored.

Financial marketing and the media focus on the early part of funding an active lifestyle in the early part of retirement. However, we should not ignore the later years when people are dealing with illnesses or disabilities. Yes, it’s a bit morbid to think this way, but again it is a reality.

We are not suggesting buying rocking chairs and planting yourselves in anticipation of growing old, but you’d be wise not to ignore the years when you may need help with daily living activities, such as bathing, dressing and eating. Increasingly, we are encouraging a long-term care component in more and more of the plans we help build for clients.

The business oversight of many planners and others is not modelling a number of the costs associated with the later portion of retirement. As we all know as healthcare providers, long-term care is a considerable expense to prepare for, but some experts believe it will be affordable if you sell your house or if you no longer need to spend on other costs of life beyond your care.

Factoring costs

We urge you strongly to investigate and incorporate the cost of long-term care or home care into your strategic wealth plan. Confirm how you’ll afford this type of care while you’re still looking ahead to retirement and not having to make quick, and possibly hasty decisions. Of course, everyone will experience a different journey but do spend some time understanding what care could cost in our “golden years.” Furthermore, don’t count on the government to fund your retirement.

At the risk of being accused of being pedantic, long-term care means moving into a facility, while home care means having someone come into your home to provide assistance. There are reasons that people need long-term care or home care. For one, they may suffer from dementia. They may have a spouse who can no longer provide needed care, or they don’t have any family member to provide support. Many boomers and some Gen Xers reading this article will already relate as they attend to elderly parents’ needs.

 

In our next post, we look at some of the costs associated with long-term care.

 

Mike Jaczko, BSc Phm, CIM®, a pharmacist by background, is a portfolio manager and partner of KJ Harrison, a Toronto-based private investment management firm serving individuals and families across Canada. For more information, email:mjaczko@kjharrison.com.

Max Beairsto, B.Sc. Pharm., MBA, CVA is a certified valuation analyst and business intermediary with Enterprise Valuators, an Edmonton-based valuation and business sales advisory firm. Their Pharmacy Edge division assists pharmacy entrepreneurs across the country needing transactional and valuation advice. For more information, email: max@enterprisevaluators.com


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