Being prepared and knowing that you may eventually need to pay for a place in an aged care facility should form part of your retirement planning.
Should you sell the family home to fund your aged care costs?
Retirement can trigger questions about your current living arrangements, but so can the need to pay for aged care costs. Have you planned for this phase of your life?
One of the most important questions to answer is what to do with the family home. Should it be retained or sold, and how will this impact your personal situation?
This decision may best be made with family and a financial adviser, so the impact can be managed and any entitlements can be maximised.
Take note that the Federal Government’s Department of Human Services now conducts an income and assets assessment for everyone moving into an aged care home. This assessment takes into account any existing means-tested payments such as Aged or Service pensions. The result of the assessment will determine any contribution you may need to make to your aged care services.
Case study: Louisa
How to keep the cash flowing
When the day comes and the regular salary stops, you’ll need to be prepared to keep the cash flowing in. This is why the earlier you start your retirement planning, the more options you’ll have to achieve the goals you want.
Whether you have money in super or other investments, the biggest fear of retirees is “what if my money runs out?”. That’s where these tips may help you.
Powers of attorney
It’s important to set down your wishes for how you want to live out your retirement years – whether it’s in your own home, assisted or unassisted, or in an aged care facility – and who should make decisions for you if you are not able to.
A power of attorney is a legal document that allows you to appoint a person to represent you if you should fall ill or lose the capacity to make legal, financial, or medical decisions for yourself.
Alternatively, you could write:
- An anticipatory direction to record your wishes about medical treatment in the future
- An advance care directive (living will) to document your wishes for your future medical care
Remember to take the time to discuss your wishes with your family, whatever they may be.
Source: ASIC MoneySmart.