Calgary-based family therapist and eldercare coach Maureen Osis says as people live longer it can mean they may require greater support in later years. “I encourage people to have conversations that are focused on the concrete aspects of financial wellbeing.”
Statistics show: Canadians are living longer and longer lives. While that news is generally well received it also raises serious questions about how we plan for our financial future.
According to Statistics Canada, as of 2004, a 65-year-old Canadian woman was reasonably likely to live another 21 years; a 65-yearold Canadian man, almost 18 years. But when planning for retirement, we must also prepare for the less-likely scenarios.
In 2006, more than half a million Canadians were age 85 or older, up 25 per cent from 2001. Our longer life spans are an important issue when planning for retirement, says Lee Anne Davies, gerontologist and head, Retirement Strategies, RBC. "You're likely to live several decades in retirement and during that period, you're also going to go through a number of different life events and life stages."
Preparing for those transitions can be very challenging, she says, in part because "most of us working today cannot visualize ourselves as an 80-year-old, or as someone who has just lost their partner. How do you prepare for that? Roles and identities change. Having a financial plan in place as you move into retirement - and revisiting it as you adjust to these life events - can be so beneficial to one's peace of mind."
"People are living longer than they expect to. For some, it means they may require greater support in later years," Maureen Osis, a Calgary-based family therapist and eldercare coach. "It's one thing to be 65 or 75. It's quite a different thing to be 95. Even if you're doing well, and there are lots of people over 90 who are, energy reserves are low."
Life transitions can create unexpected expenses, says Ms. Osis. "If you stay in your home, there are maintenance costs and taxes, but what if you move? One woman who moved into assisted living when the time was right for her recently told me her rent has increased by 40 per cent over five years. She just wasn't counting on that."
Increasingly, early retirement is adding to the challenge many people face in building a nest egg that will meet their expenses throughout life. "In Canada, the trend we see is people retiring at around age 62 or so. When you think of how long you're likely to live, that's quite early," says Ms. Davies.
Those who choose to work longer, until 65 or even beyond, have additional years to build assets and pay down debt. "Most people are not supporting children at that point, so they can really put a lot of money into the retirement nest egg," says Ms. Davies.
Working longer also means a shorter retirement, years of added compound investment growth and reduced demands upon the retirement portfolio.
Those last years of work don't have to be a grind, says Ms. Davies. "Many employers are open to building a lot of flexibility into those years. And you get a chance to begin test-driving your retirement, figuring out how you or you and your partner might want to spend your time and what your expenses will be like in retirement."
Those are very important questions to consider and test, because lifestyle and related expenses are the most important factors in retirement planning. "We're always asked, 'How much do I need?' It depends how much you spend, and most of us don't have a clear view of what our expenses are," says Ms. Davies.
Another critical element of effective planning, advises Ms. Osis, is communication. "It's always sensitive to talk about money, but I encourage people to have conversations that are focused on the concrete aspects of financial wellbeing. A lot of boomers are giving time and attention to their parents, but report that their children are saying, 'Don't expect that from me.'"
Boomers have traditionally been an age-denying society, she says, but it may be time to start thinking creatively about the realities of aging. "We've been so married to our individuality and independence. Perhaps as so many of us live longer, the new aim will be healthy interdependence."
Many people in midlife are providing financial support to both their children and their aging parents, says Ms. Osis. "One family recently told me that they'd just spent $90,000 for a year of long-term care services when they brought Mom from another province. They don't really have that kind of money. These are not easy things to plan for, but we need to do it."
Social advocate makes a case for longer-term planning
Much more than effective retirement planning will be required to meet the needs of an aging baby boom, says Maureen Osis, family therapist and co-author Your Aging Parents. "As a society, we need to create age-friendly communities."
A great deal of attention is currently directed to the health care needs of seniors, she says, but 'well-care' is overlooked. "The whole infrastructure of daily living support must be considered." That includes necessities such as food and shelter, but must also include social interaction, physical activity, access to family and friends and the other components of a meaningful life.
Meeting those needs requires effective planning, both individually and as a society. Today, many elderly people find themselves without the support they require, she says. "I hear often from seniors that wonder what to do when we've had three days of snow and they can't shovel the walk, or who need assistance with home maintenance chores and whose nearest family member is 2,000 miles away."
For more information, visit www.elderwise.ca.