The Financial Challenges of Caring for an Aging Parent

Canada’s population is aging at an exponential rate and its showing no sign of slowing down.  For the first time ever, according to Statistics Canada, seniors are outnumbering children.  In fact, by 2031 it is predicted that 1 in 4 Canadians will be over the age of 65.  These numbers can be explained by a number of factors but the biggest reasons for this age gap is that the baby boomers are starting to reach senior age and people are simply living longer.  These statistics indicate that there is about to be a pressing need for long term care for adult children’s parents.  The bad news is that, according to the Canadian Medical Association, Canadas health care system is woefully underprepared for the challenges of an aging population.   This means that it is often left in the hands of family members to care and plan for aging relatives.

What You Need to Know

Caregivers are the back bone of the long-term care system in Canada. According to Statistics Canada, it is estimated that 5.4 million Canadians currently provide some level of care for an elderly relative. Whether it be looking after a senior in their home or caring for one in your own home, it can be an emotionally and financially draining task for both the caregiver and the senior.

These statistics can be daunting and leave people feeling panicked about both their relatives care and their own care. While there is no perfect solution, the best thing that you and aging parents can do is develop a plan well before the care is even needed. This can be easier said then done, but it is something that should not be shied away from as it will only make both of your lives easier when the time comes.

Many people do not think of the additional expenses that they might incur while being a caregiver. These could include additional grocery costs, travel costs, taking leave from work, and medical costs… to name a few. Taking advantage of the resources and planning tools available to you, as well as allocating money towards future care now, can be a great place to start. Below are some suggestions that could decrease the financial burden on both yourself and your parent: 

Long Term Care Insurance

Long Term Care Insurance is a great way to ensure that there will be cash available if yourself or a relative is ever in need of home care. There are two models available: a reimbursement type plan and a cash allowance type plan. The reimbursement plans tend to be a bit cheaper, but can be limiting. The cash allowance type plans provide cash to be spent as needed, but do tend to a be bit more expensive.

Government Benefits

Take time to familiarize yourself with the government benefits offered to seniors needing home care.  These can include meals on wheels, tax credits, benefits, home care, and support groups.

Talk to Your Family

Having a plan in place well before your parent requires care can greatly reduce conflict amongst siblings or other family members when it comes time to make difficult decisions regarding care and financing said care.

Take Care of Yourself First

Caring for an aging parent can be an emotionally and physically demanding job and it can be easy to burn yourself out.  Make sure that you are sharing the responsibility with family members as much as possible.  It may seem simple, but you can’t care for another person if you are not even looking after your own needs.

The Bottom Line

Caring for a parent can be an overwhelming task, but taking the time to plan well ahead of time will provide you with a sense of security. It may be a tough conversation to have, but you will be glad you did.

Brenda McCrae

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About the Author

Brenda McCrae is a Wealth Advisor with Assante Capital Management Ltd. and an Insurance Advisor with Assante Estate & Insurance Services. Please contact her at (519) 752-3155 to discuss your particular circumstances prior to acting on the information above.

Assante Capital Management Ltd. is a Member of the Canadian Investor Protection Fund and Investment Industry Regulatory Organization of Canada. Insurance products and services are provided through Assante Estate and Insurance Services Inc.

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