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Aging and Medical Expenses

Imagine suffering a serious illness and not being able to afford the best medical care......

It is a waste of time debating the odds that you or your spouse will ever need long term health care because your chances of needing it will either be 100% or they will be 0%.

One fact is not debatable: an unfortunate health care event such as a serious stroke or injury or an incurable disease such as Alzheimer's will cost you dearly.

These major health costs can destroy your retirement plans.

There are only three ways you can pay for these major health costs:

                (1)          From your income,

                (2)          By liquidating your assets

                (3)          Medicare and Health Fund reimbursements

Substantial expenditure for major health problems will lower your standard of living and increase the possibility that you and your family will exhaust your income.

Health care costs will increase as you get older. These extra expenses traditionally coincide with the time that witnesses the greatest declines in the amount of retirees' assets and will put greater pressure on assets to perform.


There are two ways to deal with the financial consequences caused by major health events.


1. An investment strategy that will secure your long-term retirement income.

Invest the time at the beginning to ensure that the strategy you select to fund your retirement lifestyle will provide you with the certainty you need to meet the costs of medical contingencies.  

Your strategy should include access to extra capital and the ability to temporarily increase your income as needed.


2. Prepare for where and how you will live during the latter stages of retirement.

This will happen when you may have to move from an active lifestyle to one that requires support and assistance.

From a planning perspective, ignoring the fact that you could live well into your late 80's and 90's can have a significant impact on the quality of life you can expect to enjoy during the later stages of your retirement.

Australia's aging population is about to explode.

Currently the ratio of working Australians to those retired is 5 to 1. Without a substantial increase in the younger, tax-paying population, this ratio will be 2 to 1 by 2050.

One of the big issues facing aging Australia is the increasing pressure that a shrinking tax-paying population will apply to Government resources and available funds.

In the case of funding for aged housing, this is now especially true.

Already people are being asked to pay residential nursing home bonds amounting to many hundreds of thousands of dollars for aged care nursing facilities.

The fears are that these fees will only rise once demand reaches full steam.

Plan in advance on how you will manage the payment of any nursing home bonds and, at the same time, maximise your income - including your Age Pension.