Monday, May 4, 2015

Health issues more important than Finances for boomers

As they approach retirement, Canada's younger boomers (aged 50-59) are focusing on health concerns over finances, with 70 per cent ranking changes to their physical health highest on the list of top challenges they expect to face as retirees, according to the 2013 RBC Retirement Myths & Realities Poll (PDF file).  What this means for the Federal government is that they need to pay attention to issues around Health Care.

In Canada Health Care is a provincial responsibility but the Federal government gives funds to help maintain National Standards.  It is clear that the way forward and on issues is through partnership and collaboration between the provinces and the Federal Governments.

On the one hand, you have the federal government saying problems with health care are because of how it is being delivered by the provinces; the provinces say it is because they are not getting enough money. No matter what the jurisdiction, the parties will have to work together
"Younger boomers are more health-conscious as they near and enter retirement. Watching their older relatives and friend’s age has made this generation more aware that good health is not something to take for granted," said Amalia Costa, head of Retirement Strategies & Successful Aging, RBC. "What they aren't yet as aware of, however, is that health issues of their loved ones may have an impact on their retirement plans - not only on their finances, but also in terms of time commitment and emotional stress. It's important to work with a financial advisor to take all aspects of aging into account when making future plans."

Finances ranked a distant second, with 57 per cent expecting changes to income to be a challenge during retirement. Within these rankings, men (73 per cent) are particularly concerned about changes to their health, compared to women (66 per cent).

The RBC poll, now in its fourth year, continues to underline how expectations do not always match realities. For example, while four-in-10 younger boomers (40 per cent) do not expect health or disability constraints to ever change their lifestyle or independence, almost three-in-10 (27 per cent) report that a significant health issue or decline has affected them or someone in their family within the past year.

At the same time, 42 per cent of these younger boomers responded that being a caregiver to another adult was a support role they had already performed, were doing now or expected to do in future. Some of the impact of that caregiving, already experienced or expected by younger boomers, include:

  • Significant increase in stress levels (50 per cent)
  • Significant out-of-pocket expenses (24 per cent)
  • Moving/making accommodation changes (18 per cent)
  • Reducing number of paid hours worked (15 per cent)

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