Planning for retirement

Don’t base your financial requirements on your current heath. 

The cost of frail care facilities

In the ever-changing world of financial planning, your view on your personal financial planning and retirement may need to be reconsidered. Planning for retirement has also become planning for a lifestyle change.

Different to many years ago where your retirement might have meant a change to a slower pace, it also generally came with a reduction in your overall cost of living. In modern times, if your planning was accurate, your most expensive budget item should be your medical aid. But, this might no longer be true.

Ironically, modern medicine and improved medical procedures has come at a cost. It’s called longevity. What we are finding with longevity is that growing numbers of retired people are having to consider a frail care facility, because they are no longer in a position to look after themselves.

An illness or advanced age could result in limiting one’s daily living activities. In many instances, retired folk can take comfort in knowing that their retirement home has comprehensive frail care facilities – and this facility may be needed on either a temporary or permanent basis.

If the retirement home or village offers such facilities, you may be in for an unpleasant surprise when you find out the additional costs that may be incurred. Added to this, medical aid benefits may be limited and in some cases, you will need to fund this additional expense yourself.

It has now become an important part of retirement planning to establish what cover your particular medical aid will provide in such instances. There is an important and very distinct difference between medical care and frail care.

Medical aid is traditionally and specifically designed to cover medical care and procedures – so the question you need to ask is can you afford to pay for the frail care you might need when you are unable to manage your normal activities without assistance?

This article is a general information sheet and should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted. (E&OE)

Greg Visser
Senior Financial Advisor
FPM Risk and Wealth Management
011 778 9300