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Jake Jun Qiao, Certified Financial Planner (CFP), Chartered Life Underwriter (CLU), Member of Million Dollar Round Table (MDRT). Please contact me for any financial planning inquires.

 

Position: Home - Health Insurance - Long Term Care
Retirement Income and Long Term Care Insurance

Meet Danielle and Marc

Health-care costs can seriously affect your available retirement income
 
Danielle is 55 and Marc is 57.
They have two adult children, both with careers and young children of their own.
Danielle and Marc are planning to retire at age 65.
They are mortgage-free.
Their retirement income and other government sources will cover their basic expenses during retirement.
 
Together, they have saved $300,000 in RRSPs to afford their chosen retirement lifestyle, which will include travelling abroad and visiting
their three grandchildren, as well as supporting their favourite charities and community events.
 
Danielle plans to continue to contribute $5,000 to RRSPs annually and Marc an additional $3,000 to non-registered assets for the next 10 years. Assuming a 5 per cent growth on these contributions, they should accumulate approximately $555,000, after tax. They plan to start
redeeming a monthly retirement income for a total amount of $15,000 per year once Danielle retires.
 
Protecting Marc and Danielle’s retirement income against health-care costs.
 
Marc and Danielle are increasingly aware of hew their health might impact them and their family as they grow older.
 
Marc could suffer a debilitating stroke in his late 70s and Danielle could develop osteoporosis or heart disease as she ages. Both Marc and Danielle are committed to providing care and support for each other as they grow old. Marcs main concern is that helping with his physical care, due to a stroke or any other health event, will be too much for Danielle to handle on her own.
 
Neither parent wants to disrupt their daughters career and family or cause their son to worry from afar by asking them to provide the required care. A long-term care facility might be their only option, but that means living apart from one another and without the comforts of home and friends. The alternative is to hire professionals to provide the appropriate level of care at home.
 
Twenty years from now, these costs could be even more significant considering the health-care rate of inflation. There could be other expenses to consider as well, depending on the level of government support available at that time:
 
medications for prevention of a second stroke, pain management and management of depression
physical and occupational therapy to set up a daily home exercise program with follow-up two times a year for reassessment and modification of the program as needed
equipment and supplies such as shower chair, grab bars, toilet arm support, hand splint and a four-wheel rollator
 

The Challenge 

Marc’s extra health-care expenses put strain on their monthly retirement income.
 
Danielle and Marc would continue to use their retirement income to maintain their home and ccver other expenses. They would need to divert money from their retirement income to afford the level of care Marc required.
 

The Solution 

Planning ahead with long term care insurance.
 
As they are currently in their 50s, Danielle and Marc may qualify to include long term care insurance in their retirement planning. The weekly income-style benefit would be available to help them cope if a significant health event or progressive medical condition resulted in the need for ongoing care.
 

The result 

Marc and Danielle have used a portion of their retirement income to fund their long term care insurance coverage for Marc. Having long term care insurance in place allows Danielle and Marc to protect their chosen retirement until age 100.

Simply dial 416-835-8805 for details.
 

 

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