Don't count your nest egg before it hatches

Do you really have enough saved for retirement?

“You can be young without money but you can’t be old without it.” - Tennessee Williams

Various care options are available for your retirement years. It’s important to examine those options from a financial perspective that takes your personal needs, preferences and requirements into account. By taking a personalised and well informed approach you will be well-equipped to make the right choices for yourself and your family.

Some people prefer to receive care at home in their later years, rather than moving into a retirement village. However, at-home-care brings a range of cost implications that you may not have considered.

Some examples of retirement expenses that may be incurred by retirees who opt to remain in their own homes include, but are not limited to:

  • In-home physiotherapy and other specialist care: as we age our body becomes less agile and more susceptible to illness or complications. Some conditions or ailments require specialist care such as regular physiotherapy, to ensure mobility and therefore independence.

  • In-home nursing services: to manage treatment of ailments that are not serious enough to warrant hospitalisation or specialist care.

  • Personal care: to help with everyday tasks impacted by lessening mobility.

  • Transport: health restrictions may leave retirees without a driver’s license. Access to alternate transport then becomes necessary.

  • Home modifications: hand rails or ramps may be needed to ensure retirees are able to remain living in their own home.

  • Meal delivery: as cooking can present safety hazards and challenges for retirees with physical ailments or mobility issues, meal delivery services may be necessary.

  • Household jobs: retirees still face chores like cleaning or gardening, but may need help due to age-related physical conditions.

  • Equipment: it may be necessary to invest in items like walking frames or wheelchairs to ensure personal safety, mobility and a degree of independence.

For people who are happy with the convenience and sociability offered by a retirement village or nursing home option, there are a range of alternatives to match your needs and financial position. Some related considerations that it may be wise to get detailed advice on include:

  • Rising costs: As demand increases for aged care with an aging population, costs could rise. An understanding of inflationary aspects and market movements will ensure a realistic future assessment of the retirement village costs you can expect to incur.

  • Inclusions and exclusions: The way that fees are structured can vary. By analysing and comparing different residential homes you can decide if flat fees provide adequate cover for daily living costs such as meals, laundry, cleaning and utilities. You will need to understand what exclusions are not covered, as you will need to pay for those expenses yourself and they will need to be factored into your retirement budget. For example, you may still be required to pay for your own medical costs or treatment, or nursing services that may become necessary. Some nursing homes include some personal care service and assistance in their standard fee. What first appears to be a good option with the lowest fee, might actually end up costing more in the long run.

  • Practicalities: Consider comfort from the perspective of an advanced age – and the practicalities associated with that. For example, find a retirement home that can offer a ground floor or single level dwelling, to avoid the added cost of modifications such as ramps later on. Look for wider hallways in the event that reduced mobility requires the use of a wheelchair or walking frame.

  • Quality of life: How pro-actively social is the retirement home’s approach to its community? Are there regular activities? Also consider that, if you intend having guests, such as your children or grandchildren, is their adequate space for entertaining – or is there a guest room?

For more information on retirement planning, please contact your Morgan Stanley Financial Planner.

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