Have you financially planned for aged care?

Disturbing new research shows how little Australians are preparing for aged care.

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Key Points

  • National Seniors surveyed members about funding their aged care.
  • Survey received 5,000 responses.
  • 14% of older Australians surveyed have financially prepared for aged care.

Despite all the publicity on aged care, very few Australians are financially planning for care in later life.

New research from National Seniors and Challenger, found that only 14% of older Australians surveyed have prepared financially for aged care.

The report called ‘Planning for Age Care Costs’, is based on a survey of more than 5,000 National Seniors members and supporters.

The survey revealed another 38% had thought about aged care costs. It also found that planning for aged care costs was higher among those of a more mature age, higher education and greater wealth.

National Seniors CEO and Director of Research, Professor John McCallum says the figures are alarmingly low for Australians preparing for a comfortable later life.

“It is critical that aged care costs are built into later life financial planning. People are hesitating because of the negative media around nursing homes or simply denying the fact that they will need care and will have to pay for at least some of it.”

The survey found that respondents who had exposure to aged care were 75% more likely to plan financially for care. This suggests that people need better information and more simplicity to help with planning.

“Having financial resources to access aged care and support services of choice can greatly increase retirees’ quality of life and independence."

“A financial plan that includes aged care also relieves stress and anxiety, either for family members or the older person themselves,” Professor McCallum said.

Challenger's Head of Retirement Income Research, Aaron Minney said that aged care planning does not have to be onerous and provides peace of mind for later life.

“Like other aspects of retirement planning, people find it hard and confronting when forced to consider the fragility of old age, leading many to be caught off guard by unplanned aged care costs. Making a plan ahead of time can help ensure out of pocket costs are covered and provide confidence that you’ll be well looked after as you age.”

The report noted that because Australians are living longer, care is often provided by retired children, so that someone in their 90s is cared for by a child in their 60s or 70s, which was not something previous generations experienced.

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