Wealth Connexion’s Financial Advisors in Brisbane, discuss the things to consider when thinking about your future when considering aged care.
For most of us, navigating how to manage our financial assets to set ourselves up for stress-free retirement care is daunting. As more of Australia’s population continues to age into the retirement phase of our lives, it’s important to start navigating how you will manage your finances, and how you will care for your elderly family members’ futures, as well as your own.
From January first, 2023, the age for the aged pension changed from 65, to 67 years old. This is because Australia’s population is living longer, meaning there is increasing demand for aged care services. It is definitely worth considering consulting professional financial advisors, to help you navigate what you need to know and help ensure your future is secured.
Aged Care Fees are Regulated
Aged care in Australia has strict regulations that govern fees and charges to protect consumers. There is a degree of flexibility within the guidelines that enable aged care facilities to adopt fee structures to meet their own financial obligations.
A financial advisor will help you come up with a funding strategy, which will help you understand some of any hidden costs of retirement, and what you can expect to pay for care.
Help estimating costs
A great resource to help you estimate the cost of aged care, is the government-funded Residential Care Fee Estimator website. Fees vary depending on each individual facility, and one or more of the following may apply:
| Type of fee | Included |
| Daily basic | Living costs such as meals, power, laundry. |
| Means-tested | An additional contribution towards cost of care determined by Department of Human Services (DHS) and based on your means-tested income and assets. |
| Accommodation | The government may cover part or all of this as determined by DHS income and assets means-test. |
| Extras/additional options | Applies where higher accommodation standards or additional services are required. Variable depending on the home and available facilities. |
Beware Hidden Costs
Annual and lifetime means-tested fees are capped by government regulations, however additional charges such as excursions, internet access, and hairdressing for example, can apply. Take the time to check with the facility you are considering, to find out what their associated costs are, and which extra services are available and charged for. The cost of these services can sometimes be disproportionate to the service supplied and can add up to a substantial amount. An itemised account outlining a breakdown of the resident’s services must be supplied by aged care providers, and it must outline each associated charge. It’s important to note that legislation states that these fees cannot be charged more than one month in advance.
Plan ahead – Your future self will thank you
Sometimes people feel forced to sell their homes to afford care for an ageing partner, which can affect the age pension that they receive. It can also mean one partner being left without a home and needing to seek accommodation with other relatives or seek alternate housing.
Self-funded retirement doesn’t always consider our increasing life expectancy, so calculations for retirement funds often fall short of what will be needed.
This is where your financial advisor can help.
We have financial advisors in Brisbane and beyond, that will be able to provide the professional support and relevant advice needed, to come up with a financial strategy that secures your aged care financial future.
At Wealth Connexion we know first-hand, you really are never too old, or too young to plan for your future.
Sources:
Australian Government Department of Social Services | Aged Pension
