Senior couple planning their finances with an advisor in their home.

Are you curious about retirement living but not sure whether you can afford it on your retirement income? (Especially if you don’t have a pension plan?) Even financially secure seniors worry about money management and how to enjoy a good lifestyle on a fixed income. To help, we asked a certified financial planner to share tips on tax credits, estate planning, how to plan for healthcare costs over the long term and how and when senior living can save you money.

“Most seniors get sticker shock when they first hear about retirement residence costs,” says Tina Tehranchian, a certified financial planner and senior wealth advisor at Assante Capital Management. “It’s often because they think the costs are additional to their current living expenses. However, there are savings they may not consider. If you’re renting, your rent will be replaced by the monthly cost of the residence, or if you sell your home, you’ll have income and save property taxes and maintenance costs. Plus, the extra amenities and services provided at the retirement residence must be purchased privately if you live at home.”

Understand the true cost of living at home

At Amica, your monthly fee includes rent, all meals and snacks, housekeeping and maintenance, a gym and fitness classes, entertainment, recreation and social events, 24-hour emergency monitoring, à la carte care care and more. If you use the budget planning tool in our Senior’s Financial Guide, you may discover that your current monthly costs of housing, maintenance and security, groceries and meals out, memberships, entertainment and in-home services ring in at a similar or even higher rate.

“Seniors often underestimate the cost of home ownership because many maintenance expenses are lump-sum expenses that happen every few years,” says Tehranchian, referring to things like roof and driveway repairs, painting and appliance replacements. “If you add up these expenses, plus property taxes and the cost of recurring services such as lawn care and snow plowing, they can be substantial.”

Make a financial plan for care

Financial planning and estate planning help older Canadians prepare for retirement and potential health challenges down the road. (Consider that 47 percent of seniors aged 75 and over had a disability in 2017, for instance, or that in-home personal care costs around $30 per hour on average.) Yet, one recent survey found that 66 percent of Canadian respondents had limited or no understanding of the health and long-term care options and costs they should be saving for to live well in retirement. 

“A CFP professional can prepare a financial plan that includes a scenario based on the possibility of needing care during the last 10 years of life, factoring in those extra expenses,” says Tehranchian. “Seniors who own a home may want to sell to offset costs, especially if both spouses require care.”

Read 7 secrets of financially fit seniors for Tehranchian’s advice on developing a plan that boosts tax savings and investments. It’s always better to start sooner rather than later, especially now. As she says, “Rising demand for senior care due to Canada’s aging population and inflation can drive up costs over time.”

Take advantage of tax credits

Another benefit of seniors using a certified financial planner is to minimize tax payments via a decumulation strategy — withdrawing wisely from registered and non-registered savings accounts over time — and to leverage tax credits.

“The Medical Expenses Tax Credit and the Disability Tax Credit are two of the largest tax credits that can reduce after-tax expenses for seniors,” explains Tehranchian. “Healthcare costs in a retirement residence or the entire cost of a nursing home can be considered medical expenses, and a large percentage of those expenses can be deducted from income. This means that many seniors may be able to get back 25 to 30 percent of their health-related expenses if they are sizable.”

Consider quality of life, which is priceless

Shouldn’t you and your loved ones enjoy retirement with optimism, companionship and excellent senior care? (Remember, you can still leave an inheritance while covering your own needs, as outlined in “Your retirement money: spend it or save for inheritance?”) Plus, as Globe & Mail personal finance columnist Rob Carrick noted in one recent column, “There’s a cost in money, isolation and family stress when seniors choose to remain in their own private homes.” At Amica, residents consider the connections, delicious and nutritious meals, convenient amenities and services that let them pursue their passions, plus attentive, personalized care that adapts with them—all well worth the costs.

“Even though senior living may seem expensive, in most instances if you compare it with living at home and paying out of pocket for the cost of care, the cost may end up being similar,” says Tehranchian. “So seniors shouldn’t feel guilty about paying for extra services and amenities that are available to them in a senior’s residence.”

Book a virtual or in-person tour to find out what it’s like to enjoy living on your own terms in an elegant Amica residence with outstanding dining, amenities, activities, senior care and safety measures.