Long-term Health

Planning ahead can help give you more financial flexibility.

WE ALL WANT TO LIVE long, healthy lives and enjoy a full and energetic retirement. A balanced lifestyle, including eating well and staying active, can help achieve that goal. However, lifestyle is only one part of the story.

A complete retirement plan involves considering what might happen down the road so you are ready to face any challenges. One of the most difficult things to predict is how healthy you will be in retirement. Statistics tell one side of the story. Between the ages of 65 and 74, 12 per cent of seniors say they have some limitation to “functional capacity” – which means their ability to manage basic and instrumental activities of daily living.1 Between the ages of 75 and 84, that number rises to 27 per cent. At age 85 and over, it accounts for the majority– 57 per cent – of seniors.2

What statistics can’t say is whether you, personally, will need assistance either at home or in a long-term care facility. They do suggest, however, the importance of appropriate planning. With your advisor, you can estimate your potential health-related costs and make arrangements to help cover them – just in case.

Plan for potential costs

You can take steps to help ensure you have the financial flexibility to get the care you need, if you need it.  One option is to earmark a portion of your nest egg for health care expenses. This money should be accessible without much notice, and it should not be used for any other purpose. You may want to specify that whatever is left after you pass away be part of your legacy to loved ones.

1 Basic activities of daily living include walking, bathing, toileting, eating and dressing. Instrumental activities of daily living include shopping, housekeeping and food preparation.2 https://secure.cihi.ca/free_products/HCIC_2011_ seniors_report_en.pdf

Another option is long-term care insurance. This insurance can help you pay for extended care not covered by government health plans, such as accommodations in a long-term care facility or in-home services like nursing care, physiotherapy or meal delivery. Types of plans vary, so work with your advisor to choose the option that makes the most sense for you and your family.

It’s all about being prepared

The fact is, health-related costs may end up being one of your biggest budget items in retirement – or they may not. What’s important is to determine the best strategy for your personal situation. In other words, be prepared.

© 2015 Manulife. The persons and situations depicted are fictional and their resemblance to anyone living or dead is purely coincidental. This media is for information purposes only and is not intended to provide specific financial, tax, legal, accounting or other advice and should not be relied upon in that regard. Many of the issues discussed will vary by province. Individuals should seek the advice of professionals to ensure that any action taken with respect to this information is appropriate to their specific situation. E & O E. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Any amount that is allocated to a segregated fund is invested at the risk of the contractholder and may increase or decrease in value. Manulife, the Block Design, the Four Cube Design, and Strong Reliable Trustworthy Forward-thinking are trademarks of The Manufacturers Life Insurance Company and are used by it, and by its affiliates under licence. CS2516E FALL 2015