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The True Costs of Aging In Your Home! Â

The informa3on  provided  herein  is  current  at  the  3me  of  wri3ng,  for  people  living  in  the  GTA.    

Copyright The  Academy  for  Seniors  Real  Estate,  Inc.  2014  

I Own  My  Home,  It’s  Free  to     Stay  Here,  Right?   Here’s  the  story  of  George  and  Marlene,  who  s3ll  live  in  the  home  they   purchased  40  years  ago.  With  Marlene  in  her  mid-­‐80’s,  and  George   coming  up  to  his  80th  birthday,  their  lives  have  changed  a  great  deal   over  their  3me  in  their  home,  and  so  has  their  neighbourhood  changed.    

Marlene has  already  surrendered  her  driver’s  license,  while  George  is   worried  about  his  upcoming  80th  birthday  re-­‐tes3ng.  George  is  sure  he   will  fail  his  test,  given  the  problems  he  has  with  his  eyesight,  and  is  very   worried  about  the  impact  on  their  social  life  if  neither  of  them  are   licensed  to  drive.  On  top  of  this,  Marlene  is  finding  mobility  an   increasing  problem  as  her  legs  no  longer  seem  to  work  the  way  they   used  to,  and  George  is  no3cing  numerous  nagging  liOle  things  that  are   gePng  to  be  more  of  a  problem  as  he  ages.    

Despite their  growing  challenges,  they  are  currently  doing  fine,  and   when  their  kids,  all  of  whom  live  in  different  provinces,  suggest  they   might  benefit  from  living  in  a  re3rement  residence,  they  don’t  see  any   reason  to  move.    

George and  Marlene  are  on  the  same  page  when  it  comes  to  this,  as   they  see  that  it  is  free  for  them  to  live  in  their  home,  but  will  cost  a  lot   of  money  to  move  into  a  re3rement  residence.    

The real  ques3on  here  is  whether  living  in  their  home  is  actually  free?  


The Financial  Picture  

George and  Marlene’s  income  consists  of  government  and   private  pensions  plus  George’s  investments.                                    Income  Source                                            Amount         OAS  (Old  Age  Pension  for  both   George  and  Marlene)                              $1,175.00                                $1,230.00                        CPP  (George  only)   Company  pension  (George  only)                                  $  975.00     RRIF  (George’s  RRSP  that  he                                  $  500.00   converted  when  he  was  71                            Total  Monthly  Income  


There are  other  sources  of  funds  or  subsidies  they  might  want  to   inves3gate,  such  as  the  Guaranteed  Income  Supplement  (GIS),   the  Survivor’s  Pension  or  a  disability  allowance  to  cover  various   health-­‐care  costs.     Their  home  was  appraised  at  $520,000.  If  they  wanted  to   consider  a  reverse  mortgage  to  pay  for  some  of  the  costs   incurred  by  staying  in  their  home,  they  could  get  up  to  50  per   cent  of  the  market  value,  or  $260,000.  Assuming  5%  commission   and  $10,000  closing  costs,  selling  the  house  could  make  almost   $484,000  available  to  invest  at  a  conserva3ve  2%  for  an  annual   interest  income  of  $15,000  or  $1,250  per  month  for  15  years,   and  s3ll  have  approximately  $484,000  le]  in  their  estate.   2    

Current Living  Costs   George  and  Marlene  have  never  really  kept  track  of  what  they   spend  each  month,  so  we  asked  them  to  keep  a  record.  We   warned  them  to  be  surprised,  as  most  people  are,  at  what  they   spend,  and  on  what  they  spend  it.     These  are  certainly  modest  expenses  for  a  couple.  Income  net  of   expenses  is  about  $690,  not  an  uncomfortable  margin,  but  if   medical  costs  came  along,  they’d  be  in  trouble.  In  a  recent  (2014)   study,  it  was  revealed  that  Canadians  65  years  old  spent  an   average  $54,000  per  year  from  2009  to  2012.  Had  George  and   Marlene  been  spending  like  this,  they  would  certainly  have   found  themselves  in  financial  trouble.     On  the  next  page  is  a  breakdown  of  George  and  Marlene’s   monthly  expenses.     Now,  let’s  look  at  four  possible  scenarios  for  George  and   Marlene:  staying  home  with  Community  Support  Services,  with  a   private  agency  providing  care,  with  live-­‐in  care,  and  moving  to  a   local  re3rement  community.   3    

Current Living  Costs  


Staying at  Home  Safety   Check  List   Because  many  seniors  have  not  updated  their  homes  in   years,  and  when  they  did,  it  was  usually  without  regard  to   safety,  a  full  safety  audit  should  be  done.     This  audit  covers  from  the  front  door  through  to  the   basement,  and  focuses  on  things  like:   •  Sufficient  and  bright  ligh3ng   •  Non-­‐slip  floor  surfaces   •  Updated  and  grounded  electrical  service  and  wiring   •  Reliable,  energy-­‐efficient  appliances   •  Grab  bars  and  handrails   •  An  accessible  laundry  area   •  An  alarm  system  for  home   •  Personal  alarm  lanyards   •  Cordless  phones.   These  are  just  some  of  the  things  a  Safety  Audit  will  check.   If  you  need  help  finding  someone  to  do  the  audit,  we  have   a  number  of  specialists  we  can  recommend  to  you.  


Staying at  Home  Check  List   • 




Mobility support:  Mobility  support  is  essen3al  for  someone   like  Marlene,  whose  bad  knees  (she’s  too  old  to  have  them   replaced)  make  her  fearful  of  walking.  Staying  mobile  is  vital   for  errands,  exercise  and  overall  good  health.   TransportaQon  assistance:  Giving  up  driving  is  emo3onally   devasta3ng,  but  transporta3on  of  some  sort  is  essen3al  for   shopping,  appointments  and  social  ou3ngs.  Op3ons  include   an  account  with  a  taxi  company,  support  services  like  Home   Instead  (,  subsidized  transit   services,  or  volunteer  drivers  (o]en  provided  by  service   clubs).   NutriQon  support:  Meals  on  Wheels  is  but  one  of  the   op3ons  when  it  comes  to  having  diverse  food  delivered  to   your  home.  In  some  communi3es  there  are  several  op3ons   to  choose  from,  including  programs  run  by  service  clubs.   Dinners  sui3ng  a  diversity  of  cultural  preferences  can  cost  as   liOle  as  $7.50,  depending  on  where  you  live.   Personal  care:  Personal  care  refers  to  bathing,  grooming,   and  dressing.  Marlene  finds  bathing  difficult  and  dislikes   showers.  George  some3mes  let  his  personal  grooming  go   unaOended  to,  and  since  the  laundry  is  in  the  basement,   clothing  may  be  worn  just  a  few  more  days  before  being   washed!  


Staying Home  with     Community  Support   In  this  scenario,  home  safety  must  be  addressed,  which  will  inevitably   mean  some  one-­‐3me  minor  renova3ons  for  safety  and  access,  and   some  basic  safety  equipment.  Safety  equipment  could  include  things   like  a  stair  li],  an  electric  li]ing  seat  to  help  Marlene  get  out  of  a   seated  posi3on,  or  a  device  to  help  her  get  out  of  bed.      

Other items  like  shower  benches,  grab  bars,  and  raised  toilet  seats   cost  less,  but  they  s3ll  add  up.      

Experts say  you  should  plan  on  inves3ng  1%  of  your  home’s  value  per   year  in  having  private  home  care.    

George is  quoted  $73,000  per  year  for  full-­‐day  homemaking  and   personal  support  services  at  $25  per  hour  or  $200  per  eight-­‐hour  day,   not  including  any  overnight  support.      

Ini3ally, most  people  don’t  need  8  hours  a  day,  so  carefully  assess   what  services  are  actually  needed.    


Staying Home  with  Community  Support   (conQnued)   At  this  3me,  George  and  Marlene  really  only  need  assistance  with   laundry,  general  3dying,  and  one  bath  a  week  for  both  Marlene   and  George.       A  subsidized  community  service  is  used  for  homemaking,  and   assistance  with  bathing  is  provided  through  the  local  Community   Care  Access  Centre  and  covered  by  the  provincial  health  plan.       They  also  order  two  meals  a  day  from  Monday  to  Friday  from   Meals  on  Wheels.  This  halves  their  grocery  bill  and  is  arranged   through  the  local  community  care  agency.     Sadly,  George  has  to  give  up  driving  so  they  choose  taxis  for   transporta3on.  They  also  pay  for  a  personal  alarm  system.       George  and  Marlene  should  be  able  to  afford  this  approach  on   their  current  income  for  the  next  two  to  three  years.   8  

Staying Home  with  Community  Support  


Staying Home  with  Agency  Care   Marlene,  in  her  mid-­‐80’s,  is  in  need  of  knee  replacement  surgery   but  the  doctors  have  told  her  she  is  too  old  for  the  surgery  and   subsequent  rehab.  Wobbly,  she  falls  and  breaks  a  hip  on  the  way  to   the  basement  laundry  room.    

A]er three  months  in  hospital  and  rehab,  she  and  George  face  a   very  different  scenario.  During  Marlene’s  hospital  stay,  George   con3nued  with  the  usual  supports  but  began  to  neglect  his   personal  care  and  became  depressed  and  increasingly  forgekul.      

The CCAC  decide  that  Marlene  and  George  need  more  help,  so   assistance  with  showers  is  increased  and  Marlene  receives  a  total   of  one  hour  per  day  of  personal  care,  as  well  as  a  weekly   physiotherapy  visit.      

George’s need  for  help  has  increased  greatly,  as  he  now  also  needs   help  with  personal  care,  cueing  to  prepare  breakfast  and   microwave  the  frozen  Meals  on  Wheels  entrées,  assistance  on   errands  beyond  what  a  taxi  driver  can  provide,  and  general   companionship.     10  

Staying Home  with  Agency  Care   (conQnued)   An  eldercare  consultant  suggests  that  a  permanent  part-­‐3me   Personal  Support  Worker  (PSW)  should  come  in  for  3  half-­‐days  a   week.       The  PSW  will  provide  morning  personal  care,  prepare  breakfast,  do   laundry  and  basic  cleaning,  heat  and  serve  a  hot  lunch,  check   supplies  and  be  sure  George  is  clear  about  hea3ng  up  dinner.  In   other  words,  she  will  make  sure  things  are  under  control.       She  will  also  use  their  car  to  accompany  them  on  errands.  She  will  be   hired  from  an  agency  so  she  will  be  more  expensive,  but  the  agency   guarantees  that  she  is  bonded,  insured  and  health  and  police-­‐ checked.       She  will  also  be  automa3cally  replaced  if  unavailable  or  ill  and  will  be   supported  by  an  agency  registered  nurse  for  ques3ons  or  concerns.       All  billing  will  be  handled  through  the  agency  office  at  a  rate  of  $25   an  hour.     11  

Staying Home  with  Agency  Care   (conQnued)   A  new  challenge  that  George  and  Marlene  now  face  is  that  these   new  care  requirements  include  reinsta3ng  the  car  expenses  and   increasing  the  car  insurance  for  a  non-­‐family  driver,  for  a  very   different  monthly  cost  and  a  challenge  to  their  current  monthly   income  of  $3,880.       To  pay  for  the  services  of  their  PSW,  their  son  looks  into  a  reverse   mortgage  so  that  they  can  access  the  capital  in  the  home.       The  payouts  are  tax-­‐free,  and  George  and  Marlene  need  not  begin   repayments  as  long  as  they  live  in  the  house.  However,  they  are   leery  of  pledging  the  home  they  worked  so  hard  to  pay  off,  a   common  situa3on  for  many  seniors.     This  is  a  major  financial  decision  that  they  should  discuss  with  a   trusted  financial  advisor,  as  well  as  with  their  family.   12  

Staying Home  with  Agency  Care   (conQnued)   • 



If a  reverse  mortgage  is  chosen,  George  and  Marlene  can   choose  to  receive  a  lump-­‐sum  payment,  which  they  could   invest  in  an  annuity,  or  to  receive  monthly  payments  based   on  their  stated  needs.   In  Ontario,  there  is  a  Provincial  program  that  provides   assistance  with  municipal  property  taxes,  and  there  may   also  be  other  tax  programs  available  through  the  local   revenue  services  department.   The  family  should  be  sure  that  any  tax  credits  have  been   applied  for,  especially  the  disability  and  aOendant-­‐care   credits.  


Staying Home  with  Agency  Care  


Staying Home  with  Live  In  Care   As  he  approaches  his  80th  birthday,  George  is  demonstra3ng   increasing  signs  of  demen3a  and  is  reluctantly  taking  medica3on   to  help  slow  its  progress.  He  is  also  on  other  medica3ons,   including  one  for  high  blood  pressure.       Marlene’s  broken  hip  from  several  months  ago  has  never  healed   properly,  resul3ng  in  her  requiring  increasing  doses  of  pain   medica3on.  They  had  to  have  a  stair  li]  installed  to  allow  her   access  to  the  bedroom  and  bathroom.       Medica3on  is  delivered  pre-­‐filled  in  a  blister  pack  from  the   pharmacy,  so  their  permanent  part-­‐3me  PSW  only  need  remind   them  to  take  their  pills.  However,  some3mes  when  she  arrives  in   the  morning,  the  dinner3me  and  bed3me  doses  have  not  been   taken.       So  far,  they’ve  managed  to  pay  for  these  extra  costs  from  a  savings   account  George  had  kept  in  reserve.  George  and  Marlene  clearly   need  more  3me  devoted  to  the  management  of  their  daily  care   and  household  opera3ons.     15  

Staying Home  with  Live  In  Care   (conQnued)   With  George’s  increasing  level  of  demen3a,  he  is  becoming   unbearably  overwhelmed  with  not  only  banking,  bill  paying,   decisions  about  house  and  car  expenses,  but  any  devia3on  from  the   rou3ne  seems  to  overwhelm  George,  and  his  sons  are  becoming   more  involved.     The  prospect  of  affording  a  PSW  for  eight-­‐hour  days  is  daun3ng  –   $200  a  day  ($73,000  per  year!)  -­‐  and  George  and  Marlene’s  sons  are   also  rightly  concerned  about  their  parents  being  home  alone  at   night,  given  George’s  recent  habit  of  wandering  and  the  overall   decline  of  their  neighbourhood.     The  cost  of  the  type  of  around  the  clock  they  need  would  reach  over   $200,000  per  year,  completely  unreasonable  for  them.       Their  sons  suggest  hiring  a  live-­‐in  assistant  through  the  overseas   Live-­‐in  Caregiver  Program  offered  by  Human  Resources  and  Skills   Development  Canada.  But  the  placement  would  cost  at  least  $3,000,   payable  to  an  agency,  would  take  up  to  four  months  to  complete,   and  the  caregiver’s  approximate  salary  for  a  44-­‐hour  week  would  be   $1,100.    


Staying Home  with  Live  In  Care   (conQnued)   The  idea  of  a  live-­‐in  caregiver  sounds  great,  but  this  op3on  comes   with  one  incredibly  big  considera3on:  George  and  Marlene  would   be  their  caregiver’s  employer.       At  a  3me  when  both  of  them  are  facing  increasing  health   challenges,  they  must  now  supervise  a  live-­‐in  caregiver  and   manage  all  of  the  paperwork?  This  would  include  keeping  a  record   of  their  live-­‐in’s  regular  and  over3me  hours  on  a  weekly  or   monthly  basis.  This  informa3on  will  be  needed  for  the  live-­‐in's   applica3on  for  permanent  residence.     George  and  Marlene  must  also  pay  for:   •  The  $3,000  placement  cost.  (This  is  the  fee  they  pay  to  the   agency  that  finds  the  caregiver).  It  could  take  up  to  4  months   to  process  everything,  including  visa  and  immigra3on  papers   and  health  and  criminal  record  checks.   •  Mandatory  benefits  for  the  live-­‐in  including  workplace  safety   insurance  for  the  dura3on  of  their  employment,  and  medical   insurance  coverage  un3l  he  or  she  is  eligible  for  provincial   health  insurance.   •  TransportaQon  costs  to  bring  their  live-­‐in  from  his  or  her  home   country  to  Canada.   17    

Staying Home  with  Live  In  Care   STAYING(HOME(WITH(LIVE>IN(CARE ITEM MONTHLY(COST Housing(costs(as(per(baseline $810.00 TOTAL(HOUSING(COST $810.00 Groceries((including(live:in(care:giver) $750.00 TOTAL(FOOD(COST $750.00 Car(Insurance(&(Repairs $150.00 Gas(for(car((4(fill:ups/month) $220.00 TOTAL(TRANSPORTATION(COST $370.00 Lifestyle(costs(as(per(baseline $1,560.00 TOTAL(LIFESTYLE(COSTS $1,560.00 Personal(Alarm(System $55.00 Assistance(with(bathing((covered(by( provincial(health(plan) $0.00 Full(time(live:in(care(giver((44(hours/week(@( $25/hour) $4,767.00 Care(Manager((1(hour/week(@($125/hour) Home:making(((4(hours/week(@(subsidized( rate(of($15/hour) TOTAL(HEALTH>RELATED(COSTS MONTHLY(EXPENSES(WITH(LIVE>IN(CARE

$500.00 $260.00 $5,322.00 $9,072.00


Moving to  a  Local   ReQrement  Community   Marlene  experiences  a  health  crisis,  which  results  in  a  trip  to  the   emergency  department.  She  realizes  that  it  is  3me  to  seriously   look  at  re3rement  communi3es.  If  she  had  another  episode,  she   might  have  to  move  to  long  term  care  and  George  would  be  le]   alone.       Her  son  retains  an  eldercare  consultant  to  assess  their   demographic,  social,  geographic  and  care  needs,  to  revise  their   budget  again,  and  to  make  a  short  list  of  re3rement  residences.       Based  on  selling  the  house  for  $520,000  and  assuming  they   earned  2%  on  their  house  proceeds  of  $484,000,  they  would   have  $15,000  a  year,  or  $1,250  a  month,  to  augment  their   current  cash  flow.  They  would  have  a  poten3al  monthly  income   of  $5,130,  without  touching  the  capital.       Alterna3vely,  the  sum  could  be  used  to  purchase  an  annuity  to   top  up  the  monthly  income.       19  

Moving to  a  Local   ReQrement  Community   (conQnued)   George  and  Marlene  decide  to  view  medium-­‐range  residences   from  three  large  re3rement  chains.       For  a  one-­‐bedroom  suite  of  400  square  feet,  three  meals  and   snacks,  all  ac3vi3es,  a  24/7  nurse  on  call  and  weekly  doctor  visits,   they  are  quoted  $4,200  for  one  person  and  $750  for  the  second   person  sharing  the  suite.  A  “care  package”  of  $800  is  quoted  for   Marlene  to  have  assistance  with  medica3on,  morning  and  bed3me   personal  care  and  three  baths  per  week,  for  a  total  of  $5,750  per   month.       At  first  glance,  that  seems  like  a  he]y  monthly  fee,  but  let’s   compare  it  to  staying  home  with  a  live-­‐in  caregiver,  which  would   have  given  George  and  Marlene  only  44  hours  of  support  a  week.   At  the  re3rement  community,  many  services  are  included  that   they  would  have  paid  for  had  they  stayed  at  home.       20  

Moving to  a  Local   ReQrement  Community  


At home  with  live-­‐in  caregiver  

ReQrement community  

Paying for  44  hours  of  live-­‐in  support   per  week/days  only  (no  assistance   during  the  night).  

Support is  available  24/7,  as  needed,   and  is  typically  included  in  the  monthly   fees.  

TransportaQon to  doctor’s   appointments.   Weekly  visits  from  a  private  caregiver   who  will:   •  Direct  the  live-­‐in's  implementaQon  of   any  treatment  plans  for  George  and   Marlene   •  Make  sure  medicaQon  is  taken   •  Make  sure  medical  appointments  are   made  and  followed  up  on   •  Monitor  any  changes  in  George  or   Marlene’s  health  

Weekly doctor  visits  on-­‐site.  (included)   Care  Package:   On-­‐site  assistance  with  medica3on,   morning  and  bed3me  personal  care  and   three  baths  a  week.  (extra)   *  They  can  purchase  more  help  when   they  need  it  in  a  shared  care   arrangement  offered  by  the  re3rement   residence  so  they  don’t  need  to  hire  a   private  caregiver.  


Meals on  Wheels.   Household  costs  such  as:  Property   taxes,  uQliQes,  food,  maintenance,   entertainment  etc.  

Three meals  per  day  plus  snacks.   (included)   George  and  Marlene  no  longer  have  to   pay  for  many  of  their  regular  household   expenses  because  most  are  included.  


In Summary   So,  have  George  and  Marlene  “spent  smart”  to  make  the  most   of  their  money?   •  In  Scenario  I,  the  couple  was  somewhat  in  denial  of  their   health  and  lifestyle  needs.  They  made  minimal  changes  to   their  lifestyle,  although  accep3ng  Meals  on  Wheels  probably   made  the  largest  contribu3on  to  their  health,  making  it  very   easy  for  them  to  eat  healthy,  balanced  meals.  It  also  opened   the  door  to  their  accep3ng  outside  help.  This  is  o]en  the   sign  that  more  help  is  going  to  be  needed  soon.   •  In  Scenario  II,  hiring  their  permanent  part  3me  PSW  was   undoubtedly  costly  and  making  up  the  shorkall  did  deplete   George’s  savings.  However,  it  allowed  the  couple  to  stay  in   their  home,  use  their  car  and  keep  up  the  semblance  of  their   usual  life.  This  was  an  important  phase  in  their  transi3on  to   accep3ng  help  in  their  own  “space,”  especially  for  Marlene.   When  Marlene’s  health  and  George’s  demen3a  meant  more   hours  of  PSW  support  were  needed,  it  would  have  been   impossible  to  fund.       In  fact,  their  sons  were  planning  to  review  the  situa3on  with   them  when  Marlene  was  admiOed  to  hospital  with  her  most   recent  health  crisis.   23  

In Summary   • 


In Scenario  III,  even  if  having  a  live-­‐in  caregiver  seemed   financially  affordable,  they  would  have  required  the  services  of   a  care  manager  to  supervise  and  direct  the  care;  a  family   cannot  simply  hand  a  caregiver  the  house  keys  and  hope  for  the   best!     A  care  manager  would  ensure  that  medica3on  was  taken  and   medical  appointments  were  made  and  followed  up  on,  and  she   would  also  monitor  changes  in  health  condi3ons  and  direct  the   caregiver  in  implemen3ng  treatment  plans.  A  typical  care   manager  would  charge  $125  per  hour  and  be  needed  at  least   one  hour  per  week  in  this  scenario.   In  Scenario  IV,  moving  to  a  local  re3rement  community,   although  George  and  Marlene  are  paying  more  per  month  than   in  scenarios  I  &  II,  they  are  saving  on  many  expenses  that  are  no   longer  required.       They  will  also  be  able  to  acquire  more  care  -­‐  at  $25  per  hour,  in   15-­‐minute  increments  -­‐  when  they  need  it  in  a  shared-­‐care   arrangement  offered  by  the  re3rement  residence,  rather  than   having  to  hire  someone  privately.  This  alone  represents   significant  savings  for  George  and  Marlene.   24  

Summing It  All  Up   Staying  at  home  while  you  age  is  a  wonderful  idea,  but  if  it  is  to  be   an  effec3ve,  safe  alterna3ve,  it  is  not  free.  And  it  is  o]en  more   costly  than  what  you  would  pay  in  a  re3rement  community.  You   also  have  to  take  into  account  the  unseen  costs  of  social  isola3on,   which  is  far  less  likely  in  a  re3rement  community.     The  key  is  for  family  members  to  discuss  plans  for  re3rement  or   long-­‐term  care  well  ahead  of  3me.  Having  a  prac3cal  and  caring   discussion  early  on  is  much  beOer  for  everyone  than  having  to   make  decisions  in  a  hurry  a]er  a  health  crisis.       As  always,  knowledge  is  power,  so  gather  your  informa3on  now  to   face  the  challenges  of  this  wonderful  chapter  of  life  with   confidence  and  success.     If  you  need  any  help  with  the  informa3on  contained  within  this   document,  or  you  need  assistance  loca3ng  resources,  please  make   sure  you  reach  out  to  me.  


This informaQon  is  courtesy  of:  

The True Costs of Aging In Your Home  

There are many misconceptions when it comes to choosing the best option for yourself, or your elderly parents, to age in comfort. This bookl...

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