When You Can No Longer Cope on Your Own
Jerry Seinfeld once famously observed that people are more afraid of public speaking than they are of death—which means they would prefer to be the guy in the casket than the one giving the eulogy! The prospect of requiring expensive care when we can no longer take care of ourselves is a little like that: in our retirement years, we seem to be more afraid of the cost of long-term care than we are of death. This fear is not even based on statistics: it is more visceral than that. Point out to anyone that spending takes a dive in Phase 2 of their retirement (which, as we saw, is a time of diminished mental or physical capacity) and the rejoinder invariably is, “Yeah, but what about long-term care?” This is the trump card in every argument about why we think we need to over-save and under-spend, even after retirement. It is also why we have trouble believing low retirement income targets.
If we take a harder look at our fears in the harsh light of day, we can finally put to rest our concerns about long-term care and get on with retirement. We need to understand better how many people will actually need long-term care at some point in their retirement years, and what the associated costs will be. For starters, care of the elderly in Canada is generally provided in one of three ways: home care, privately-run retirement homes, and government-run nursing homes.
Home care (also sometimes called “home and community care”) involves service ...