What worries aging Canadians as they prepare for long-term care?
A BMO Wealth Institute study finds that the greatest health-care-related aging concerns include:
- losing the ability to live independently (40%);
- not having enough money to pay for adequate health care (17%); and
- not being able to afford to remain in their own homes throughout their lifetimes (15%).
Three quarters (73%) said they plan to use their own savings to fund any future long-term care needs. Other funding options include:
- government assistance (45%);
- Accessing home equity via a reverse mortgage (20%); and
- long-term care insurance (19%).
The study also examined Canadians’ views on where they would prefer to receive long-term care, finding that the majority (56%) would prefer to receive it in their own home rather than in an assisted-living facility (20%). Thirteen percent would like to receive long-term care in a retirement or nursing home.
Receiving care in-home rather than in a facility, while potentially more affordable, can put pressure on family and friends who may need to take on some of the caregiving responsibilities for their loved ones. However, the report also revealed that:
- more than one third (37%) of Canadians have not discussed any financial issues related to future long-term care needs with their partner or adult child;
- fewer than half (42%) have talked about their decisions around naming a power of attorney for health or living will with their loved ones; and
- only 21% have discussed how they intend to pay for long-term care or the preferred ways they wish to receive long-term care.
The study also notes four tax-saving opportunities that can offset long-term care expenses:
Medical expenses: A tax credit is available to those who pay qualifying medical expenses for eligible dependents.
Attendant care costs: A tax credit can be claimed by those who pay the costs to hire a person to provide care, either within their own home or in an outside care facility.
Disability tax credit: Those who have a severe or prolonged impairment may be eligible to claim the disability tax credit.
Family caregiver amount: The family caregiver amount tax credit is available for those providing care for a family member with impairments in physical or mental functions.