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We close our eyes and we dream.  We dream about foreign travel and exotic locations.  We dream of a quiet country home and peaceful surroundings.  We dream of a stress-free lifestyle and idyllic family life.  Are these visions mutual fund commercials? No.  Retirement dreams.  Oh they may be idealistic, but they’re ours, and it doesn’t seem to matter if you’re in your 20's, 40's or 60's, we all dream of a retirement free of day-to-day pressures and oodles of time and opportunities to pursue all those dreams and leisure activities we’ve delayed doing.  We all believe that we will lead better lives when we ‘retire’. 

Many do.  But many don’t. 

One of the keys to a flourishing retirement is good financial planning.  Most people begin planning for after work soon after they start working.  Money is set aside in RRSPs, investment properties, stocks, bonds and mutual funds.  Calculations are done year after year to ensure that the ‘nest egg’ will be big enough to support the lifestyle you envision for your retirement.  Unfortunately, life’s demands can derail even the best-laid plans.  Far too many of us can’t or don’t put aside enough money for our golden years.  And given our lengthening life expectancies, it’s not unrealistic for a number of us to be to be ‘retired’ for as long as we worked.  Couple that with the higher risk of serious illness or chronic disease, and a lifetime of savings can evaporate almost overnight. 

The primary focus of retirement planning has always concentrated on making sure there’s enough money around when we’re ready to enjoy it.  Sadly, few of us build contingency plans into our ‘Retirement Plan’.  What will happen if you suffer a stroke or heart attack and you’re on a fixed income? Have you financially prepared yourself (and your family) for medical expenses and the costs of having home care while you recover? What will happen to your finances if you need residential care?

Many people approaching retirement (as well as those in early retirement) haven’t adequately planned for their health care.  By this, I’m referring to home care or residence based care, should it be required.  We don’t plan to get sick, we just get sick.  We don’t want to face the reality that as we age, we’ll likely have to depend upon the health care system more and more, which as we know, is already severely overburdened and strained.  We’ll also likely depend more heavily on our spouses, children, grandchildren and other relatives and friends for our care. 

Illness can strike any time.  It can be sudden, or it can sneak up on you.  None of us plans to be sick.  We don’t schedule a heart attack.  Illness, like death, happens right in the middle of something, so we need to be prepared. 

Home care or residential care cost money.  And depending on the level of care you need, it can cost a lot.  Your entire nest egg could be wiped out within a few years, perhaps leaving your spouse destitute. 

Given two options, would you rather spend $5.00 a day now for a plan that will provide money for care in your retirement, or would you prefer to pay $100.00 a day out of your savings when you are retired? Which would you choose? If you knew that you would receive non-taxable dollars to cover the costs of home care because you were unable to perform some daily living activities, would you be interested? If you answered ‘yes’ to either of these questions, then you should investigate long-term care insurance. 

The money you would receive from long-term care insurance can be used to pay for extra medical expenses.  This could help to ease your financial burden and give you the flexibility and freedom to preserve your assets, your lifestyle and your dignity. 

Ensure that long-term care insurance, along with having up-to-date Powers of Attorney for health and property, are part of your retirement planning.  Remember, morbidity will most likely happen before mortality and your life insurance only pays your beneficiary – not you – when you’re gone.  Long-term care insurance is designed for you while you’re alive and in need of care.  It’s a benefit that sweetens the autumn of life. 

Source: Kim Stanley


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