If you take on the responsibility of helping your parents choose a residential aged care facility, the topic of financial planning will soon come up. What are some of the ways to pay for the care that your parents will need in the years to come?
Different Service Levels
There are a number of different service levels, which are dependent on your parents' needs. Obviously, some people need substantial round-the-clock nursing care, whereas others only need on-call nursing. This is why the applicable care fee can be linked to needs, but the care fee is only one component of the overall cost.
Types of Fees
The base fee is for accommodation and pays for renting the living space and for the utilities associated with it. This varies depending on whether the accommodation in question is a semi-detached unit or a room inside a home. The more exclusive the accommodation, the more likely that an extra service fee will be attached to it. There can be optional extra fees for facilities that have added lifestyle and leisure options. Additionally, there's also the daily fee and the care fee—with the latter being means tested.
Care Fees
The care fee charged by a residential aged care facility can be government subsidised, hence the means testing. It's important to seek independent financial advice when you have an idea of the costs that will be incurred by your parents' care, and this cost will be clarified after means testing.
Subsidised Care
Your parents' care may be subsidised, yet your family will still have to make a contribution to the cost of their care. This is why independent financial advice is crucial, and it can be helpful to seek out an advisor who specialises in aged care. Yes, the decision may be made to sell your parents' home, which is a relatively straightforward way of creating a fund that can cover their ongoing care. Alternatively, converting the home to a rental property can also create an income to cover your parents' care.
Superannuation
The family home needn't always be sold to pay for a couple moving into a residential aged care facility, as there may in fact be enough funds in your parents' superannuation fund to cover the ongoing cost of care. Everyone's situation is different, and all options must be considered.
It might seem like choosing the best residential aged care facility for your parents is the biggest hurdle, yet you'll need to do some diligent financial planning to work out how to fund your parents' care.
To learn more, contact a company like RetireInvest Canberra.