The best way forward is to initiate conversations with your elderly parents or relatives while they are still able to make sound decisions about their future care.
However, it is not always possible to have these conversations or plan effective arrangements as aged care, personal finances, and death remain difficult topics for many people.
Whether you can fully involve your elderly relatives or need to take the initiative yourself, speaking with a financial advisor gives you a way to plan effective aged care options. It can also be a good way to keep family discussions on a professional level when emotions may be running high. With issues to consider like superannuation arrangements, assets and debts, Centrelink pensions and aged care entitlements, you can build a clearer picture of the available choices by working with an adviser.
If residential care is required, financial decisions such as how a resident pays an accommodation bond or other charges can have a significant impact on pensions, aged care fees and tax, so these should be considered in the plan.
You may also consider power of attorney options and even funeral arrangements as part of the same discussions. Your financial advisor will work with other professionals such as accountants, lawyers and real estate agents as required, enabling you to plan the best possible outcomes from this important transition.
Case Study – A time for change
Liz, a high school teacher and daughter of healthy 84-year-old parents, had not worried much about aged care until the last few years. After discussing her concerns with a friend, Liz persuaded her parents to go with her to see a financial adviser and plan for their “next steps,” whatever they might be. That turned out well, and they settled on a two-stage plan.
Twelve months later her parents, Alex and Gloria, had taken the first step and relocated to a retirement village after 45 years on their seven-acre property. Their advisor told them that the money from their property sale might mean a drop in the part pension they received from Centrelink so they were well prepared for that. The benefit was they could implement stage two in their plan, using the funds from the sale to re-arrange their investments and build a more secure base for their future income.
“When dad first retired they were doing OK. Interest rates were higher 25 years ago and they were comfortable. But as interest rates dropped it had become more of a challenge for them,” says Liz.
Her parents are settled now and still quite independent, with Liz and her siblings providing more help these days, with the small garden, shopping, transport to appointments, and paperwork.
She says the next turning point will come if one of them becomes ill or is injured. Together with their financial advisor they’ve discussed fees or charges which might be required by an aged care facility and worked out a plan to fund their future costs. Financial advisors can offer long-term guidance or targeted advice when you need help to manage specific events in your life.
Our team of aged care specialists understand these concerns and have significant experience in working with you to provide smarter aged care solutions. Contact us today.
Some of these services must be performed by an Australian Financial Services Licence holder or through an authorised representative. Your closest office can direct you to the correct advisor.
The information provided by Bentleys does not constitute financial product advice and is for general information only. It is written without taking into account any individuals personal objectives, situation or needs, and is not intended as professional advice. Any person acting upon such information without receiving specific advice does so entirely at their own risk. Please contact your Accountant to discuss your personal situation before relying on this information.