How to protect your retirement nest egg in case of illness?
As healthcare improves, most Canadians expect to live way past their 80s but if they do, the chance of developing age-related conditions and requiring long-term care increases.
Long-term care is a threat to your retirement nest egg. It costs $100 to $175 a day, or $35,000 to $65,000 each year, to meet the long-term care needs of one senior. It wouldn’t take long before such a bill depletes your retirement nest egg.
If you are counting on government programs, the situation is worse. Presently, the government meets only a small fraction – 18 per cent – of long-term care costs. On the other hand, family members pay up to 75 percent. Worse still, experts predict a crisis in funding the ballooning public long-term care bill.
So, how can you protect your retirement nest egg from illness?
One solution is using private insurance or long-term care insurance.
Assessing your need
You may be pondering, “Do I need an additional insurance plan?” That’s fine and normal. But, if you can afford the premiums, we would rather you ask yourself these questions:
- How much are you saving for your retirement?
- How well can your nest egg take an extra annual hit of $35,000 to $65,000 when you are in your 80s?
- Will you rely on family for support?
How does it work?
Long-term care insurance kicks in when you are unable to perform two of the six aids to daily living: Bathing, dressing, transferring, toileting, continence and feeding.
There are two ways long-term care plans work. You can opt for a regular monthly or weekly income from the insurer and use it at your discretion. Alternatively, the insurer can pay your long-term care bills. Either way, long-term care insurance is generally much cheaper than making out of pocket payments.
The good part is, premiums are usually significantly lower for younger applicants. Also, the payments from the insurer are not subject to taxation. But the best part is, you’ll have peace of mind knowing that your retirement nest egg can be protected from the financial effects of illness and you won’t be a burden to your family.
Planning for your retirement?
We have put together a webinar, Learn How to Retire Happy. Its completely free and you can listen in when you have the time. In this retirement training, you will:
- Learn the number one technique you need to master your money
- Obtain proven strategies used by financially successful individuals
- Learn best practices on how to plan now and chill later
Click here to listen to this free retirement training and get awesome tools and resources as well. You can also get advice from our financial coach with no obligation or commitment.
We truly care to help you understand your options so you can make an informed decision based on what is best for you and your loved one.
If you currently don’t have any type of life insurance, please feel free to get an online quote in seconds, so you can have a better idea of what this may cost you. Its cheaper than what you probably think. Plus, you can get a chance to win in our end of the year giveaway! To Learn more about Attingo, visit attingo.ca or call 1.877.302.5425.