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Managing Your Savings When Moving into Aged Care

October 21, 2021 | Aged Care Advice

The requirements for entering an aged care centre, the expenses you will incur, and where your savings will go are subject to false assumptions. Retirees have a common misconception that once they join an assisted care facility, money, assets, and property are no longer theirs. However, the investments you make before joining an aged care facility will stay yours until you decide differently.

Moving into an elderly care facility should not affect your financial situation unless your assets are poorly handled. It is recommended that you seek guidance from an accredited aged care financial adviser if you are uncertain about preparing for retirement or aged care living.

Cost of Living in An Aged Care Facility

Any aged care facility has someone who can assist you in making any financial arrangements that you may need. Several assisted care facilities even provide options such as direct debit, which allows you to pay your aged care fees and other expenses automatically, either from your bank account or by credit card, at your convenience. Depending on your circumstances, you may be eligible to have your pension sent directly to a chosen facility, allowing you to deduct your fees and other expenses, such as pharmacy bills.

Nonetheless, keep in mind that when you choose to live in an assisted living facility, you must pay the following basic fees:

  • A basic daily charge: A fixed amount that everyone must pay.
  • An income/asset means-tested fee: A variable amount that will be changed based on your income and assets.
  • An accommodation payment:  A one-time payment that everyone must make. A monetary value for your accommodation is determined by its quality, location, and characteristics.

How to Manage Savings and Finances When Living In Aged Care

Although your investments will not usually be affected by elderly care living, you can anticipate being charged a respective amount for your living arrangements in an aged care facility. Most people plan to use existing assets and investments to fund their aged care living expenses when starting their new chapter. Keep in mind that there are various options for making payments to an assisted care facility, and you can discuss your options directly with their representatives. You also need to take into account that the structure you choose can have flow-on effects elsewhere,

You might, for example, opt to pay a more significant accommodation bond than is required. When the Centrelink means test is performed, the accommodation bond is not considered. That may result in you receiving a higher pension rate and a pharmaceutical benefits card, which reduces the prices of pharmaceutical goods and could save you money in the long run.

You might also consider purchasing a funeral bond. The cost of a funeral bond is likewise exempt from the Centrelink means testing requirements. The most outstanding amount available to you will help you reduce your assets, which will, in turn, help you decrease the daily or monthly cost of elderly care. Another option is for you to buy an annuity for long-term care services. That is the process by which you make a financial contribution to a provider, who will subsequently give you regular payments for the term of the annuity or the rest of your life.

Selecting the Best Aged Care Path for You

It is entirely up to you how you handle your finances. You may want to handle your money yourself, or you may wish to appoint a family member to do so on your behalf via the use of a Power of Attorney or Enduring Power of Attorney for financial management. If you have difficulty setting up direct debit payments and keeping up with monthly bills, speak with a staff member about obtaining some assistance.

When it is time for you to plan for your Aged Care needs, Coastal Advice Port Macquarie can provide a financial plan designed specifically for you. Plan your ideal transition into Aged Care with us! Book a complimentary appointment today to learn more! 

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