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   holistic planning
 Change is coming
The pandemic is already leading to policy changes. In November’s fall economic statement, the Liberal government promised $1 billion over two years to the provinces for long-term care, contingent upon detailed spending plans.
Some provinces have also introduced new meas- ures. Advisors in Ontario, for example, might point clients to the province’s new Seniors’ Home Safety Tax Credit unveiled in November. The initiative will provide seniors and their families with tax credits
of up to $2,500 when they spend up to $10,000 on renovations to make their homes safer and more accessible: installing wheelchair ramps, stair lifts, or grab bars around toilets, tubs and showers, for example, or making modifications to live on one floor. The credit, currently available only in 2021, may entice more seniors to age in place.
That would help the public purse, said Halifax- based actuary Dr. Bonnie-Jeanne MacDonald, dir- ector of research for financial security at the NIA. She pointed to research by the Canadian Institute for Health Information showing that, with the right level of support, about one in 12 people in LTC could remain at home. A report from Queen’s Uni- versity last fall said between one in nine and one in five seniors currently in LTC would benefit from home care.
Long-term care currently costs $73,510 per resident per year in Ontario, according to a Nov- ember 2020 report by the NIA, and this figure will rise to more than $90,000 once homes incorporate the recently promised increase to four hours of care per day, per resident. MacDonald said living
at home costs only half as much. Provincial and federal governments urgently need to create robust plans that allow more Canadians to age in place, she added.
Until that happens, however, grab bars and one- time tax credits are only the tip of the iceberg. Hen- derson urged advisors and their clients to consider the costs and practicalities of aging in place: “Can you modify your home? Do you have the money
to do that? Can you easily get to your doctor, the drugstore, the grocery store from your home? If you don’t drive, do you have public transportation, or could you set up an account with Uber? Do you have family nearby or in the home? Can you afford help in the home?”
Provincial public health units — for example, Local Health Integration Networks, or LHINs, in Ontario — may provide limited home-care services. A senior (or their family members) may be able to pay for a few hours of private help each day with tasks like cleaning, meal preparation or dressing: at $25 an hour, that works out to approximately $2,250 per month, or $27,000 per year.
Full-time nursing care will run much higher. Henderson recalled an elderly neighbour who died five years ago from prostate cancer. “He hired two caregivers who provided round-the-clock care, and it
cost $10,000 a month until he moved into palliative care,” she said.
Those kinds of costs can quickly erode the value of an estate, Khorshid said.
Faced with these considerations, many clients may have no choice but to opt for institutional care. Retirement homes provide community and cater to residents’ varying levels of independence, offering services such as meal preparation, housekeeping and nursing care tailored to residents’ changing needs. Khorshid, for example, builds at minimum a seven-year length of stay in assisted living into his clients’ plans. “At a cost of $5,000 or $8,000 per
  Long-term care insurance
The pandemic may have increased clients’ interest in long-term care insurance (LTCI), which will help offset the cost of care for clients who can no longer perform daily activities like dressing, bathing, eating or toileting.
Faisal Khorshid, a financial planner and senior executive consultant at Khorshid Nieth & Associates Private Wealth Management in Saska- toon, said younger people are watching their elders struggle during the pandemic and want to avoid a similar fate.
LTCI isn’t cheap, but — as with most insurance products — younger adults will pay far less than seniors.
According to certified financial planner Jennifer Jacobs, a specialist in LTC and living benefits in Hamilton, Ont., a 45-year-old man could pay an annual premium of $1,911 for 25 years and receive an unlimited benefit of $500 per week, indexed to inflation. That premium cost rises to $3,681 for a 65-year-old man; women, who live longer on average, will pay more. “Return of premium on death” riders, or policies in which benefits kick in after a year in care, can make LTCI more afford- able or attractive to clients. Adult children or groups of siblings may choose to fund or subsidize their parents’ premiums.
Jacobs wishes more people would look at LTC insurance as a retire- ment planning tool rather than a hedge against worst-case scenarios. She used the example of a 49-year-old woman who would pay $5,731 a year, for 25 years, for an unlimited benefit of $700 per week, indexed to inflation and with a return of premium.
“By age 74, you have created a tax-free, unlimited, indexed income plan for longevity and health needs. You have no further costs and pro- tection of life, with a guaranteed $143,281.50 death benefit that passes outside probate if the policy is not used,” she said.
Even two years of LTC at age 80, she said, would equal the value of the premiums. Saving the equivalent amount of money over 25 years with a 5% return would yield “a limited benefit of” $273,524, and the returns are taxable.
While LTC insurance may be a viable solution for Canadians who qualify and can afford it, MacDonald cautions against relying on it — and other individualized strategies — to solve systemic problems. Many carriers, she points out, have left the LTCI market because it’s so high- risk and expensive.
Ideally, she said, Canada would follow other countries that have cre- ated nationwide long-term care insurance programs.
“Everyone pays into it, and they get it when they need help. If only people who wanted car insurance got it, we’d all be in a really bad situ- ation,” she said. “We all have to have it, and that’s to protect everyone. This is a public policy problem.”

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