More than three quarters of Canadians nearing or in early retirement are worried about their finances, at a time when more and more Canadians plan to age at home for as long as possible, a new survey has revealed.
The survey from Ryerson University’s National Institute on Ageing (NIA),conducted in collaboration with HomeEquity Bank, found that 77 per cent of Canadians within the 55-69 age demographic are worried about their financial health.
Additionally, 79 per cent of respondents aged 55 and older revealed that their retirement income — through RRSPs, pension plans, and old age security — will not be enough to be a comfortable retirement.
“Determining where to live and receive care as we age has been an especially neglected part of retirement financial planning,” Dr. Samir Sinha, NIA director of health policy research, said in a news release.
“These are vital considerations that can also be costly. With the vast majority of Canadians expressing their intention to age at home, within their communities, it is essential that we find both financial and health care solutions to make this option comfortable, safe and secure.”
As the COVID-19 pandemic revealed some shortcomings in the long-term care system, 44 per cent of respondents are planning to age at home, but many don’t fully understand the costs involved, the study notes.
Nearly half of respondents aged 45 and older believe that in-home care for themselves or a loved one would cost about $1,100 per month, while 37 per cent think it would cost about $2,000 per month.
In reality, it actually costs about $3,000 per month to provide in-home care comparable to a long-term care facility, according to Ontario’s Ministry of Health.
Bonnie-Jeanne MacDonald, the NIA’s director of financial security research, said it’s important Canadians understand the true costs of aging while they plan for their future.
“Canadians retiring today are likely going to face longer and more expensive retirements than their parents – solving this disconnect will need better planning by people and innovation from industry and government,” she said.
To help with their financial future, the researchers suggest Canadians should delay receiving any Canada Pension Plan or Quebec Pension Plan payments as the monthly payments increase with year of deferral. For example, someone receiving $1,000 per month at age 60 would receive $2,218.75 per month if they wait until age 70 to begin collecting.
The researchers also suggest leveraging home equity and purchasing private long-term care insurance as ways to help with financial stability for the later years.