Planning for aged care is often a time of major transition when much of your focus has to shift from wealth building to a cash-flow-comfortable lifestyle and the creation of a sustainable legacy for your family. It can often be a big shock for families to realise how much paperwork there is to sort through and how hard it is to decipher government policies and regulations. Sometimes it can seem difficult to know where to start and that is where a financial advisor for aged care should be considered one of the most important steps when protecting your future plans.
Do we really need aged care advice?
The aged care sector is complex. For instance, one seemingly small event can have a large effect on your Age Pension entitlements or your means-tested care fees. Here are just a few ways professional advice in this area can help:
- Optimising government benefits – An advisor can structure your financial assets in such a way that you do not pay more means-tested fees than required.
- Protecting your pension – We help you to navigate both the deprivation rules and asset testing structures to ensure that you receive your government pension at the highest possible level.
- Help with managing your family home – This is often the biggest asset that is put at risk for a family going into aged care. We can help you decide whether to keep, rent or sell, and what the exact cash flow and tax implications of each option will be.
- Preserving your estate – A least-cost approach to how you pay for care will ensure that the inheritance you had planned for your children or grandchildren is not unnecessarily depleted.
- Providing cash flow certainty – An advisor will help you by setting up a budget that takes into account not just the entry fees but the day-to-day living expenses as well.
The human element of aged care planning
One of the hardest aspects of planning for aged care is that these discussions with your family or children are often not easy. It is sometimes an awkward or uncomfortable time because someone’s health is failing and that there is no avoiding the inevitable, longer-term decline in independence that aging brings. For families, the arrival of a financial planner at this point can be a real benefit as they act as a neutral third party who can cut through the difficult emotions by considering the facts and logic.
If you put a plan in place that everyone agrees on you can put all your energy into more important things. Once the aged care fees are being paid and the family home is managed correctly, the resident in the care home can move in with confidence and settle into their new lifestyle and routine.
The right steps to take now
Remember that it’s not too late to start talking about these things but an even better approach is to be proactive with your planning. Waiting for a crisis to occur is no longer an option in this industry because it is all about having choices rather than being reactive and you can educate yourself with these steps:
- Gather your documentation – Get your bank statements, your property valuations, and your superannuation statements all organised and collated so you have an accurate picture of your current position.
- Discuss preferences early – Talk to your family about the type of care you would like and where you would like to live.
- Ensure you have a valid legal Will and POA (Power of Attorney) – A financial plan means very little if your children are put in the position of not having legal authority to act on your behalf.
- Seek out a Specialist – It is really important to choose an advisor who knows the ins and outs of aged care legislation as it is very different from normal retirement planning.
There is a common theme across these points. They relate to the element of control and It is one of the most difficult aspects of the natural life cycle. We know that we do not always have control over our health, but we can control how we plan for the financial costs associated with it.
If you are looking for a new plan for your future, a financial advisor in Mornington can certainly help.
Sign in to leave a comment.