A man loved his wife so much he spent $1-million over a decade so she could live at home, despite suffering from dementia. That story is told by Globe and Mail health columnist André Picard in his new book, Neglected No More: The Urgent Need to Improve the Lives of Canada’s Elders in the Wake of a Pandemic.
Mr. Picard brings a different set of eyes to the issue of long-term care than you’d typically find in the personal finance world, where long-term care often gets treated like an after-thought. Here’s a Q&A I did with him recently by e-mail on long-term care and what it could mean to your retirement:
Q: André, we have a wave of retiring baby boomers entering retirement and looking ahead to a time when they may not be able to look after themselves and live independently. What would you tell them about long-term care homes, based on what you’ve seen in the pandemic?
A: Long-term care homes are essential for most people with 24/7 care needs. But LTC should be a last resort, not the default setting for elders with care needs. Overall, only about seven per cent of elders in Canada are in care homes but that’s still almost double most Western countries, but that increases gradually hitting about 50 per cent for centenarians. The large majority of elders live in the community but we need to make that easier by investing more in supportive housing and home and community. Also, LTC homes should look like homes, not prisons. We need smaller facilities with private rooms not wards with 3-4 beds to a room.
Q: What’s your take on retirement homes, as distinct from long-term care? I’m thinking of places with seniors in communities that offer independent living but communal meals and activities?
A: There is a lot to be said for retirement homes and communities geared to the needs of elders. However, when care needs increase, they can become costly very quickly. Because of wait lists in long-term care facilities and lack of access to care, many retirement homes have become de facto LTC homes, without adequate regulation and oversight. What elders need is a wide range of options so they can choose the living arrangements that best suit them. Too many of these decisions get made in times of crisis, not in a planned manner.
Q: Cost-wise, do you have any thoughts on how the cost of living in a long-term care facility compares with buying home care services and retrofitting a home?
A: Care is costly, and too few people plan for those costs. A spot in a long-term care home can range from $2,000 to $15,000 monthly. That only gives you about three hours of hands-on care daily, so many families supplement it with services from home care workers who come to the long-term care home. Home care costs can add up quickly as a person’s health deteriorates. In my book, I wrote about one man who spent more than $1-million on home care services over a decade to keep his wife at home as she lived with dementia, much of it back-loaded in the last couple of years. In the grand scheme of things, retrofitting is a relatively minor cost; it’s labour costs that add up. Both options, LTC and home care, also require a lot of time commitment on the part of family members; the bulk of care is provided by unpaid family caregivers.
Q: What happens to the quality of life in existing long-term care homes if they lose popularity and there’s a decline in the flow of new residents and the monthly fees they pay? Could there be a financial crunch at these facilities that would affect their current clients?
A: With more than 40,000 people on wait lists, long-term care homes are not lacking clientele. But many operators are getting out because of onerous regulations and lack of return. There is also a political push to get rid of for-profit homes, even though they make up more than half of facilities in provinces like Ontario. LTC home operators make all their money on rent, and real estate, and very little on the care. As a result, there is a boom in retirement homes where, as I mentioned, care is provided à la carte by outside agencies.
Q: The financial industry often tries to sell people on saving and investing for retirement by showing images of seniors riding scooters and hiking. Do you think we need to play up the idea of retirement saving as a way of ensuring you live the best possible final years of life?
A: A 65-year-old Canadian, on average, will live another 25 years. And the vast majority of elders are healthy and active. But very few people think seriously about how they will pay for decades of retirement living and, just as importantly, pay for the often-exorbitant costs that come with a decline in health in their final years. The goal should be to ensure you enjoy best quality of life right to the end, and that takes planning. I often say that the most important conversations we have about aging should take place with family members at the kitchen table, while we’re still healthy. A lot of poor decisions get made in times of crisis.
Subscribe to Carrick on Money
Are you reading this newsletter on the web or did someone forward the e-mail version to you? If so, you can sign up for Carrick on Money here.
Rob’s personal finance reading list
Prepare for higher CPP premiums
Canada Pension Plan premiums for employers and individuals were always going to rise this year. But an unexpected economic impact of the pandemic will boost the increase even higher, even as businesses struggle to recover from economic lockdowns. Future retirees will benefit from these increases through higher payouts.
Property tax haven and hell
A comparison of property taxes in cities across Ontario. A lesson in how living in a cheaper housing market can lead to much higher property taxes. Toronto is a property tax bargain.
Best credit cards for young adults
A selection of credit cards with low to moderate fees and rewards of interest to young adults.
Who’s afraid of reverse mortgages?
CTV financial expert Patricia Lovett-Reid says reverse mortgages are one of the most disliked financial products. She wonders if it’s time to reconsider what these products have to offer people with a lot of home equity and a need for cash.
Today’s financial tool
Helpful basics on tax-free savings accounts from the federal government.
The Money-Free Zone
Rise Again, by Laura Rain and the Ceasars. Quality retro soul. This song popped up recently in my weekly Bandcamp recommendations. I have also been listening to the album An Evening with Silk Soul, by Bruno Mars and Anderson Paak. Leave the Door Open is my fave cut.
Who I’m following on Twitter
Ron Butler, a mortgage broker and housing market truth-teller.
What I’ve been writing about
- Seven stats to amaze and depress all who own a house or hope to own
- Dividend growth defeats inflation – here are four ETFs that do the job
- Five numbers that show why preferred shares are no bond substitute
More Rob Carrick and money coverage
Subscribe to Stress Test on Apple podcasts or Spotify. For more money stories, follow me on Instagram and Twitter, and join the discussion on my Facebook page. Millennial readers, join our Gen Y Money Facebook group.
Even more coverage from Rob Carrick:
- 🎧 Catch up on Stress Test: Are your parents giving you money? • Why it’s time to stop shaming the renting lifestyle • Is now the right time to buy a house? • Why are young Canadians leaving the cities they love? • Eating in: How COVID has shifted our food spending • Crisis-proof your finances? • Can you afford to live downtown? • The cost of kids
- ✔️ The housing file: The housing boom is ripping apart the financial fabric of Canada • Shut out: A well-qualified millennial home seeker throws up his hands after losing multiple bidding wars • Big city housing affordability is over – now what? • She sold her Toronto house to retire somewhere cheaper, but it didn’t work • How young adults and the whole country win with a tougher mortgage stress test for home buyers • Can’t afford your house? It’s likely not your fault
- 📈 Investing: Robo-advisers have grown out of the novelty stage. Here’s help in finding one right for you • The 2021 ETF Buyer’s Guide: Best Canadian equity funds • The 2021 Globe and Mail online brokerage ranking: Who’s best for investing … and answering the phone • Are these the stock market returns of a lifetime? • On the cusp of retirement and wondering about an ETF that pushes the limits on aggressiveness
- 💰 Your money: The five most important numbers for checking the health of your personal finances • Today’s freakishly low mortgage rates can’t last. What will pandemic home buyers do when they rise? • There’s a cost in money, isolation and family stress when seniors choose to remain in their own private homes • Taking CPP early can cost you $100,000 and limit your long term options • Fleeing the city for the suburbs? Watch out for higher property taxes, more cars and other costs
Are you reading this newsletter on the web or did someone forward the e-mail version to you? If so, you can sign up for Carrick on Money here.
