# Budget for assisted living, down the road



## gardner (Feb 13, 2014)

A lot of retirement budgeting guides mostly deal with early retirement with costs geared to things you can manage for yourself. At some point -- ~80 years maybe -- I would be budgeting for assisted living or something like that, and the costs could go up and become quite inflexible. Where I can adjust my expenses living on my own, in a home, I would be stuck with a fixed $3K to $6K or whatever.

Are there buyers guides for assisted living homes that give lists of homes and current prices, just to get a feel for what the cost ranges are?
Any feel for whether the future cost of assisted living homes is likely to follow the general inflation curve, or be different?

The vague plan I have is to take the price of an upper range assisted living home, multiply out a total cost for 15 years to give an expected lump sum that should cover it. If I notionally carve-out that lump sum at time of retirement and have it grow with the general investment yield until I am ready for the home, the final amount should actually cover the costs.

Any others planned this in any detail?


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## like_to_retire (Oct 9, 2016)

gardner said:


> Any others planned this in any detail?


I haven't planned for any specific lump sum for assisted living. I've been retired for 11.5 years.

I figure if my fully indexed pension, plus fully indexed CPP, plus fully indexed OAS already covers my expenses in retirement, then that, plus my portfolio of non-registered, plus RRIF and TFSA should cover any amount that would be required for assisted living. 

I suppose eventually I wouldn't be able to take care of my house by myself, so I could then pay for people to take care of that for me for a while, then later perhaps move to a condo. Once I couldn't get around in my condo, I could pay people to come and do things that are required to stay there. 

Then, when I'm incapable of anything other than lying in bed and requiring 24 hour care, I would be moved to one of these care facilities. At that point the expenses that weren't covered by pensions, dividends from the portfolio and RRIF payouts would come from the portfolio capital. I can't imaging I would last that long at that point, so I doubt the capital (which is 7 figures) would be burnt out before I would be gone.

That's the rough plan. Gruesome as it is...........

ltr


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## naysmitj (Sep 16, 2014)

Enjoy life now, and think on the bright side, maybe you will never need LTC.


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## milhouse (Nov 16, 2016)

I came across this article in the G&M. It talked about $2.5k/month for a private bed to the high end around $5-$6k/month for a private residence. 

I'm only in my mid 40's so I've only roughly sketched out what the plan is for assisted living. 
Plan A is to reallocate the income stream I'm building though dividends from travel to health and assisted living/residence costs. 
Plan B is to sell our primary residence.


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## birdman (Feb 12, 2013)

I have not specifically budgeted for it but if I (or my wife and I) move into such a facility I expect my normal cash flow will handle it. Presently, we spend probably 50-60,000. after tax for housing, travel, health care etc and most of these expenses will not be there if or when we move into such a facility. I like to think we have an ample cushion as well. Finally, the sale of our house should provide additional funds if required. There are other alternatives as we go forward like downsizing our 4000 sq ft home on .70 acre to perhaps an over 55 complex where all you have to do is weed a 4 x 10 ft garden bed and everything else is looked after. At some future and undecided point and prior to having to move in to a care facility I think we may gift all our assets to our children.


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## fatcat (Nov 11, 2009)

my general theory is that i will remain relatively healthy (read: independent enough to manage in my home) close enough to the exit such that the sale of my condo will cover a retirement home


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## OnlyMyOpinion (Sep 1, 2013)

You raise a very good point, the cost of such living is inflexible and tends to increase annually.

I am not aware of any published list of prices for retirement homes. That includes those that offer assisted living options.

My recent experience - a 2 bedroom apt in a retirement home with full meals in a nice dining room is $5600/mo for two and increases have been about 3 to 3.5%/yr. A 1 bedr about $4000/mo and a studio about $3000/mo for a couple. Some services can be purchased. For example dispensing your daily meds is $200/mo.
Assisted living (studio only) is $4550 per person. That provides one psw per 20 residents and a nurse for 40. You need to be able to feed yourself and no pureed meals. You must have sufficient mobility that assistance in transferring is all that is required (no lifts).

At the point of needing assisted living it is more economical to go into a long term care home. But of course the issue there is that you have to have been assessed by LHIN (previously CCAC in Ontario) and placed on a waiting list with up to 5 possible residences. As expected, the really nice homes have waiting lists of 5 to 7 years. Crisis individuals get priority. Spousal reunification has some priority over the regular wait list. 

If you get a private room at a LTCH you are paying ~$2600/mo per person these days. Semi is ~$2200/mo and Basic is ~$1800/mo. Basic varies by facility, in some it is actually a private room with a shared washroom, in others it is 4 beds/room with curtains. Basic rooms are in higher demand and are eligible for income-based support. You may pay a reduced amount - potentially nothing - depending on your income.

Keep in mind that for a couple, it is very likely that one will require assisted or LTCH living before the other. In this situation you will be paying for 2 accomodations. Recently my parents had to live separately and were paying out ~$8000/month, with another $250/mo for TV and separate phones, etc.

If you own your primary residence, selling it can help defray these costs for a while.

I don't believe there will be sufficient assisted or LTCH accomodation to meet future demand. That and the reduced quality of life I will face if I require these services have led me to choose a shorter life when that time comes.


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## humble_pie (Jun 7, 2009)

gardner said:


> The vague plan I have is to take the price of an upper range assisted living home, multiply out a total cost for 15 years to give an expected lump sum that should cover it. If I notionally carve-out that lump sum at time of retirement and have it grow with the general investment yield until I am ready for the home, the final amount should actually cover the costs.




this seems like a good plan. The only concern i'd have is that the cost of those upper range care facilities is likely to increase faster than the investment return of the segregated 15-year lump sum that is supposed to pay for the facility in the first place.

keep in mind that investment return in this plan will diminish markedly, since some of the capital itself - roughly 15% - is being spent each year. I haven't worked out any numbers but i think i'd be inclined to increase the original lump sum by perhaps 20%, or else i'd top up the fund each year with 10% of its declining value.


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## Beaver101 (Nov 14, 2011)

OnlyMyOpinion said:


> .... I don't believe there will be sufficient assisted or LTCH accomodation to meet future demand. That and the reduced quality of life I will face if I require these services have *led me to choose a shorter life when that time comes*.


 .... what? choose a shorter life, how???? 

OTOH, actuarial studies say we're all living longer with* longevity being the trend *and the financial services want us to top up our RRSPs to the max and defer withdrawals, pensions, et al to as late as possible.


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## Koogie (Dec 15, 2014)

Beaver101 said:


> .... what? choose a shorter life, how????


Eskimo funeral ?

Leaving Las Vegas style blowout ?


I'd prefer the second one, personally.


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## TomB16 (Jun 8, 2014)

My MIL went from spending $5K/mo to roughly double that when she required memory care. Her funding would have been ample, had she not have required the fanciest retirement residence in town. As it is, she will still be OK.

For those of us who are interested in higher value for our hard-earned nest-egg, there are substantially cheaper alternatives. If you consider three years at $100K per year, that's only $300K. That isn't a lot, in the context of a retirement. Also, 3 years at that level is a long time at the end of life. It ends more quickly than we expect, once things start going badly.

Even in retirement, it's important to spend below budget so there is some reserve.


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## Brainer (Oct 8, 2015)

All good advice. I'd like to add one more piece. If you really study your health like I have, you'll notice that a healthy diet, exercise and lifestyle changes will do as much for your as your retirement planning. After all, your health really IS your most important asset.


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## OnlyMyOpinion (Sep 1, 2013)

Brainer said:


> ... healthy diet, exercise and lifestyle changes will do as much for your as your retirement planning. After all, your health really IS your most important asset.


I agree, quaity of life is very important and that is best ensured by staying active and heathy. I think genetics can catch up later in life though. A family history of cancer, heart disease or dementia can certainly be 'kept at bay' but it can't necessarily be 'beat'. 

As to budget, the longer you can safely stay in your own house (or apt) and not require outside care or a move to senior's or assisted living is usually better on the pocketbook. Need to be aware though that some seniors become stubbon about this and insist on staying in their homes longer than is safe&healthy and then become a substantial burden on their family. Don't be one of those seniors!

Of course the longer you live, the more you will have to have saved for retirement, unless you intend to default in your final years down to whatever government payments exist at that time and hope they will be sufficient.


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