A chronically low number of older Australians are financially prepared for old age according to new research from National Seniors Australia and Challenger.
Only 14 per cent of Australians over the age of 50 are financially prepared for their aged care, a survey of 5,000 respondents revealed, with planning higher among those who are older, have higher education levels and greater wealth.
The figures are “alarmingly low”, says National Seniors CEO and director of research John McCallum.
“It is critical that aged care costs are built into later life financial planning. People are hesitating because of the negative media around nursing homes or simply denying the fact that they will need care and will have to pay for at least some of it.”
Greater simplicity and better access to information are needed to inflate the numbers of people that are prepared for old age, McCallum says.
“Having financial resources to access aged care and support services of choice can greatly increase retirees’ quality of life and independence,” he explains. “A financial plan that includes aged care also relieves stress and anxiety, either for family members or the older person themselves.”
According to Challenger’s head of retirement income research, Aaron Minney, the easiest approach to aged care planning is to get in early.
“Like other aspects of retirement planning, people find it hard and often confronting when forced to consider the fragility of old age, leading many to be caught off guard by unplanned aged care costs,” Minney says. “Making a plan ahead of time can help ensure out of pocket costs are covered and provide confidence that you’ll be well looked after as you age.”