Moving to residential aged care, or assisting your parents to do so, is always a challenging and emotional time. In particular, many people are unaware of the complexity of financial options that need to be considered and decided upon in relation to aged care planning.
Timely and appropriate planning and advice will be important to help you navigate this unfamiliar territory and, importantly, prevent unwanted financial consequences.
While most people are generally living longer and enjoying more productive retirements, this comes with a higher chance that you will need additional medical care and help with day-to-day living in your later years. However, many older people are not aware of the intricacies of entry into residential aged care because it is typically not considered until the need is imminent.
In our experience, the key is to be aware of the range of inter-related factors that need to be addressed and coordinated in a relatively short period of time. Particularly as the need for aged care is often urgent following an unexpected incident such as an illness or fall.
At a time that is already stressful, we urge you to seek advice from an experienced and knowledgeable financial adviser. They will help you understand the implications of various decisions with the structuring of assets to enable comfortable funding options to be identified and put in place. Regular reviews of and reforms to Australia’s aged care system, including increased means-testing, further underline the importance of seeking financial advice.
Important financial questions
Important questions for anyone considering residential aged care extend beyond finding out which options for residential aged care are available. Fees for aged care are means-tested and depend on your individual financial situation. Strategies for reducing your aged care fees, whether you sell or retain the family home and how you structure your assets need to be considered. Careful planning will also take into account how you will fund ongoing cashflow requirements for the cost of care and lifestyle expenses.
Benefits of planning ahead
The significant benefits of making unrushed and informed decisions about entry into residential aged care include:
- Support and guidance of a trusted adviser to help you navigate and understand the processes involved in transitioning to aged care;
- Time to research facilities most appropriate for your needs;
- Assistance with completion of complex paperwork including financial information which can have an impact on how much you will need to pay;
- Time to implement appropriate financial strategies for your individual circumstances which consider your long-term financial goals such as your estate planning wishes;
- Understanding the costs and how much you will need to pay based on your financial situation and any allowable entitlements;
- Utilising the time needed to enact strategies such as structuring your assets to reduce aged care fees; and
- Meeting your cashflow needs for accommodation deposits and payments, care fees, daily fees and funding optional services according to your lifestyle needs and preferences.
Your next step
Seeking sound financial advice early is one of the most important aspects to aged care planning. There is much to consider and making decisions while under time constraints and emotional pressure can be costly and less financially effective.
Please contact us for experience and insight in aged care planning for yourself or someone you love. Contact Brett, Steve or James on 3007 2007 or email email@example.com, firstname.lastname@example.org or email@example.com
At Stratus Financial Group, we help families, professionals, executives, business owners and retirees manage their complex financial affairs and coordinate their professional advisers.
Stratus Financial Group and its advisers are Authorised Representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL 357306. This is general advice only and does not take into account your objectives, financial situation or needs, so you should consider whether the advice is relevant to your personal circumstances. You should also read the relevant Product Disclosure Statements (PDS) before making any financial decisions.