Toronto, ON (Sept. 3, 2015) – The BMO Wealth Institute has released a report examining how Canadians are preparing for future long-term care needs as they age.
The report, As You Approach The Age Of Wisdom, Who Will Catch You If You Fall?, found that the greatest health-care-related aging concerns among Canadians include:
- Losing the ability to live independently (40 per cent)
- Not having enough money to pay for adequate health care (17 per cent)
- Not being able to afford to remain in their own homes throughout their lifetimes (15 per cent)
“Declining health as we age has a number of potential repercussions, including a loss of independence that often comes from requiring restrictive or intensive care to manage health problems,” said Chris Buttigieg, Senior Manager, Wealth Planning Strategy, BMO Financial Group. “High health care costs can add to the anxiety of having to make major changes to your day-to-day life to accommodate more care.”
Three quarters (73 per cent) of Canadians surveyed said they plan to use their own savings to fund any future long-term care needs. Other funding options they plan to use include:
- Government assistance (45 per cent)
- Accessing home equity via a reverse mortgage (20 per cent)
- Long-term care insurance (19 per cent)
“Canadians would benefit from working with a professional to create a financial plan that takes into account the potential for long-term care costs in the future. This will help protect your family finances and give you greater peace of mind,” Mr. Buttigieg added.
The report points out that there are many important reasons for building the potential for long-term care costs into your financial plan, including providing liquidity (especially for business owners who may have a significant portion of their assets tied up in their businesses), being able to fund a higher level of care and accounting for the possibility of changing family situations.
Healthy Conversations About Long-Term Care
The report also examined Canadians’ views on where they would prefer to receive long-term care, finding that the majority (56 per cent) would prefer to receive long-term care in their own home rather than in an assisted-living facility (20 per cent). Thirteen per cent would like to receive long-term care in a retirement or nursing home.
The report noted that receiving care in-home rather than in a facility, while potentially more affordable, can put pressure on family and friends who may need to take on some of the caregiving responsibilities for their loved ones. However, the report also revealed that:
- More than one third (37 per cent) of Canadians have not discussed any financial issues related to future long-term care needs with their partner or adult child
- Fewer than half (42 per cent) have talked about their decisions around naming a power of attorney for health or living will with their loved ones
- Only 21 per cent have discussed how they intend to pay for long-term care or the preferred ways they wish to receive long-term care
“Decisions around long-term care often involve family members, whether they become care-givers themselves or need to help finance the care. It can be uncomfortable to talk about the future in these terms, but these discussions are essential as they can help you maintain a degree of control around how you receive long-term care if it becomes necessary,” said Mr. Buttigieg.
BMO reminds Canadians of the following tax-saving opportunities that can offset long-term care expenses:
- Medical expenses: A tax credit is available to those who pay qualifying medical expenses for eligible dependents.
- Attendant care costs: A tax credit can be claimed by those who pay the costs to hire a person to provide care, either within their own home or in an outside care facility.
- Disability tax credit: Those who have a severe or prolonged impairment may be eligible to claim the disability tax credit.
- Family caregiver amount: The family caregiver amount tax credit is available for those providing care for a family member with impairments in physical or mental functions.
To view a copy of the full report, please visit www.bmo.com/wealthinstitute.
About the BMO Wealth Institute
The BMO Wealth Institute provides insights and strategies around wealth planning and financial decisions. The Institute’s team of professionals have deep expertise around all aspects of wealth planning including retirement, estate, tax and insurance.
About BMO Financial Group
Established in 1817, BMO Financial Group is a highly diversified financial services provider based in North America. With total assets of approximately $672 billion as of July 31, 2015, and more than 47,000 employees, BMO provides a broad range of retail banking, wealth management and investment banking products and services to more than 12 million customers and conducts business through three operating groups: Personal and Commercial Banking, Wealth Management and BMO Capital Markets.
Source: BMO Financial Group