When you consider retirement community living seriously, questions are bound to arise. One of the most common questions is whether staying at home with care or moving into a retirement community, like Seasons Retirement, will be the more budget-friendly option. *We sat down with Wealth Advisor, Ted Rechtshaffen, to talk about the fact that retirement home living may be more affordable than you think.
1. If you move out of your home, you are leaving behind significant expenses. First off, you will eliminate most of your food costs and utilities. If you are a homeowner, you will eliminate your condo fees, maintenance costs, and realty taxes. While it’s impossible to provide a general savings number given the range in lifestyles and realty costs across the country, it would be fair to say that most people will eliminate anywhere from $18,000 to $60,000 a year by not living at home.
2. When you live in a retirement residence or nursing home, your lifestyle expenses usually decline meaningfully. Your travel costs, dining expenses, new clothing budget, and entertainment spending – which could have been $25,000 or more when you were 70, might now be $2,500 or less.
3. There are tax credits that can help. In particular, the Medical Expenses and Disability Tax Credit are two of the largest among several that can reduce after-tax expenses. For example, suppose there are health care costs in a retirement residence or the total price of a nursing home; these can be considered deductible medical expenses. To keep it simple, this means that many seniors could get back up to 25% to 30% of their health-related costs.
4. When funding senior living, many seniors don’t take into consideration all of their sources of income which could include Canada Pension Plan, Old Age Security, RRSP/RIF, TFSAs and non-registered investment income, pension plans (personal or from a spouse), family recreation property, and so on. It is important to remember that these funds have been built over a lifetime to be used partly to cover retirement expenses; now is that time.
5. Some people have bought Long-Term Care Insurance to cover health care costs.
Additionally, there’s the non-monetary value that comes with moving into a Seasons community. This includes access to 24-hour emergency response, a planned social calendar, flexible care support, no more to-do lists or home renovations, balanced meal selections, and greater peace of mind for residents and their families.
We encourage you to speak with the Seasons Leasing Manager at your desired location for more information or book a personal tour today. Note that a version of this article first appeared in Seasons Magazine. You can find the newest edition here on our website.
*Financial advice contributed by Ted Rechtshaffen, MBA, CFP, CIM, president and wealth advisor at TriDelta Financial, a boutique wealth management firm focusing on investment counselling and estate planning. Please note this is not a paid partnership. You should consult your trusted financial advisor for personalized financial advice.