Those aged in their 40s need start the conversation about aged care with their parents in their 70s, to ensure that their parents are able to drive the personal and financial decisions that need to be made, says Anna Lawton, senior manager, aged care advice with Equity Trustees.
“The US based senior care network, Home Instead, was the first one to refer to what is now universally known as the 40-70 rule. Since then, many operators in the aged care arena have picked up the term, as it succinctly encapsulates the need for the aged care discussion.
“Quite simply, the rule refers to the importance of the ages of 40 and 70 in aged care decision making; when they turn 40, children need to think about aged care issues in relation to their 70 year old parents. With the recent aged care reforms, and the accompanying complicated financial decisions that now need to be made when planning for aged care options, the 40-70 rule applies now, more than ever,” Ms Lawton says.
Both of these ages should also act as an advice alarm of sorts for advisers, and SMSF Trustees.
“Financial advisers with clients in their 40s, should consider having the conversation with their clients about the state of their parents’ health, and whether their parents have made their aged care wishes known to their children.
“For those with older clients in their 70s the question of aged care is also worth raising. Although it may seem difficult, it is easier to have the conversation about what they want for their future, now, compared to when they may be in hospital and unable to clearly make that decision for themselves.
“The 40-70 rule impacts trustees of SMSFs as well, particularly when the SMSF is made up of 70 year old parents and their 40 year old children.
“The issues faced by those considering aged care options are many and varied, and increasingly complicated. Decisions need to be made on the sale of the family home, the varying costs of alternative accommodation options; the level of the ongoing fees; as well as the impact of theses actions on pension entitlements.
“It is important that those aged 70 face this reality, and make the decisions on aged care for themselves, while they are able to,” Ms Lawton concludes.
