Due to their longevity, women should anticipate to spend more in their retirement years for long-term care, home care, and other costs like dental care and drugs not covered by provincial programs, according to an article published by the Globe and Mail
. Looking at household spending patterns and existing academic research on retirement security and health spending in Canada, HOOPP’s research team found that health-related expenditures have been taking a bigger slice of income since the 1990s.
The impact on retirement can be huge; even people who start retirement on a good financial footing may find themselves with inadequate income should they need long-term care. Healthcare costs that are initially low or non-existent can gradually ramp up due to such life changes. Based on HOOPP’s findings, government-run nursing homes can cost $25,000 to $40,000 a year. Private assisted-living facilities are dearer at $40,000 to $100,000, and home care plus other associated costs could reach $35,000 annually.
One key trend noted in the study is that both and men are usually in good financial shape as they start retirement, and financial stress starts to build in the 80-to-85 range. Among men who don’t require long-term care at age 85, 26.5% have inadequate incomes as determined by HOOPP (less than 50% of working-age salary); the percentage rises to 34.7% among 85-year-old men who need long-term care. For women, 25% have insufficient incomes before long-term care, and 44% don’t have enough income when they start needing such assistance.
Another trend: at ages 85 and older, 14.1% of women and 8.6% of men live in a nursing home, while 17.1% of women and 9.8% of men reside in a seniors’ residence. The story behind these statistics, according to Hidas, is that older men are more likely to receive care from a spouse. Women of that age, often alone, are less likely to have a partner to rely on.
Citing a 2016 Canadian Life and Health Insurance Association
survey, HOOPP’s study notes that almost 75% of people have not accounted for long-term care costs in their retirement planning. It also points out the need for government concern on this, as unplanned costs increase the burden on the public healthcare system.
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Longevity agreements are a natural response to higher life expectancy: Canada Life
According to Statistics provided by Kristina Hidas, senior manager of strategic research at the Healthcare of Ontario Pension Plan (HOOPP), just over half of people aged 65 are women. At 75 years old, the proportion grows to 57%, and at 85, the percentage swells even further to 68%. Recent research by HOOPP focused on its implications – specifically in terms of health-related costs not covered by provincial healthcare plans.