More about choosing & paying |
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How are we going to pay for a retirement home? Once you find out what retirement living actually costs, you may wonder how you are ever going to afford to pay for the care and lodging you require. Of course, the earlier you have planned ahead, the better, and if you have planned meticulously you might be all set. For most people this is not likely the case, of course.
However, there are many ways to pay for a retirement home including payment plans, insurance coverage, ownership options and surprising resources that you might not know you have. Across several pages, we take a look at how you can afford to pay for excellent retirement care.
Financial assistance and managing costsMany people are surprised at what they can actually afford , when it comes to paying for a retirement home. For example, we have heard from seniors who did not know how much their home was worth on the market and were pleasantly surprised at how much actual equity they had available. In other cases, their kids took steps (financial steps, that is) to make sure that parents were well-cared for.
In other cases, you may find that you are entitled to benefits from employment insurance benefits. There might also be some health benefits available from provincial governments' health insurance. You can read more about health insurance policies that cover retirement care.
Using your money smartly in retirement ownership Renting a suite or seniors' apartment is nice, and as we said, you may find that this is very affordable. You can learn more about typical rental costs for retirement home suites.
However, there are a variety of options that offer more control and fiscal responsibility.
" I looked at what houses sell for, and I realized I had enough capital "
— Ernie, Amica at City Center, Mississauga For example, retirement condos present a happy medium between ownership and responsibility. A condo allows you to benefit from real estate price increases while also offsetting some of the responsibilities associated with home ownership. Learn more.
Another option, called life lease properties also finds a happy medium between renting and owning.
How do you know what you can afford?
No one can say for sure what you can afford, of course, and you need to take a close look at all your finances and make the best decision for you. There are some rough guidelines you may find helpful as you plan financially for your retirement home stay, though….
Traditionally, financial advisers have said that 70% of pre-retirement income should be enough to live on comfortably, in retirement. This is a rough guideline, of course.
On average, women who have reached the age of 65 can expect to live for another 20 years (19.9, to be exact, according to an OANHSS report). For men, the average time span is slightly lower, at 16 years. (Sorry, those are just the facts.)
As you age, you might also expect to need more care, which will also be more expensive. In the period of the mid 70's and later, people can expect health to decline and you may need expensive care. Fortunately, in Canada, social security alleviates much of the financial burden for seniors. To learn more about your own retirement home financing, we urge you to consult a financial advisor.
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