This is a guest post from Sheryl in Ontario, who is 40 years old with a grown daughter, and is trying to rebuild her retirement dream just 20 years too late for early retirement.
** I know that living in Ontario, we are very lucky to have the health care we do, but the system is not perfect. It is easy to take the system for granted and believe that all our health care will be “free” for our entire lives. I’m not writing this to complain about paying for health care, but rather to perhaps give the young(ish) crowd around here something to think about when doing their own planning. After all, forewarned is forearmed.**
Around here, financial independence is the common goal, and from reading this, and other PF blogs (and associated comments) most of us seem to be an independent bunch in the rest of our lives as well. My parents have always valued being able to take care of themselves and their family, and have instilled their fierce sense of self reliance in their children. Their own parents lived in their own homes far into old age, and either passed away in their home or in hospital after being admitted for a few days.
My parents have always been hard working physical people. The home they currently own is a bungalow. They originally bought a small house on a decent size lot with plans of building another house on it, but then they found another house for sale that was going to be demolished by a developer if it wasn’t sold, so they purchased it, had it moved, and then my father built the basement up underneath it, lowered the house onto the block walls, and moved in shortly there after. (Welcome to my childhood, I knew how to mix concrete and mortar, and how to lay cinder blocks when I was 9 years old).
They have some money saved, a small pension coming in (we moved countries in 1976 so my father only had about 18 years to contribute to it), and they have enough money for what they need, a fairly frugal lifestyle with a few luxuries like going out for seniors lunch once a week.
Now everything has changed. My father’s health has declined significantly in the last few months, to the point now where he can no longer roll himself over in bed, let alone stand or walk. The hospital will only release him to one of two options, either to a nursing home, or to his own home providing there is 24 hour nursing care (cost of that is $400 per day). As much as my mother wants him home and to look after him, she is not physically able to pick him up etc,.
In Ontario, nursing homes are either public or private. Private ones can charge whatever they want, public ones are controlled by the government, and they all must charge the same. Ward beds are $1620/ month, semi private are $1,863 and private are $2,167. Financial assistance is available, based on income, for ward rooms only. Additionally, once a hospital declares you are medically stable, they charge the patient the same rate that would be charged in a nursing home, until the patient is released.
As I’ve been going through the limited options for my fathers care, I couldn’t help but think about how we all talk about frugal living, keeping our costs low, etc.. What happens if we are faced with not being able to look after ourselves, either through an accident when we are younger, or later on as a result of age? Even if we have set up our budgets to live on $1000 or $1500 per month in (early) retirement, our choices for our own care are drastically reduced, especially if you live as a couple, and one person still has to live at home from the money saved.
My parents never thought they would have to face this, so much so that they wrote into their wills that any offspring that “put them in a home” would forfeit any inheritance. I have always respected their opinions about this, but now feel it has been irresponsible of them to not plan for if there came a time when they could not look after themselves.
I must admit, this experience is making me re-think how much I will need before I feel I have enough. Perhaps I will work a few more years to ensure I have enough to fund a private room if needed (I don’t play well with others), or maybe a series of part time jobs so as not to touch my nest egg as much. I know how much I need to live on now, and now know how much I might need to live later.
If I don’t end up needing it, I’m sure I can think of some way to use the extra money before I die.
In the FI/RE community, I haven’t read where anyone has approached this subject, and I’m interested to find out how others are planning for any kind of large expenses that could change your plans.