It is often the case that 90% of healthcare costs come in the last 10% of life. In this instance I am using healthcare costs in its widest sense to include not just doctors, hospitals and medications but also residential care homes and other means of caring for yourself when you find it difficult to care for yourself.
At present in Ireland you can seek help from the state and in general this pretty good. However, you will have limited choice and may not get all the services that you wish. If you are lucky you may get help from your children but many of us do not wish to be a burden to them.
It is important therefore that in your planning you examine what long term care choices you would like to make while you are able to do so. Do you want to remain in our own home? Do you have a preferred location for residential care? You then need to estimate to the best of your ability what the cost of each option will be when you are likely to need it.
For example, the average age of people in a nursing home in Ireland is 82.5 years. From this we deduce that for many people they will need nursing home care approximately 17 years after they retire.
The Review of the Fair Deal scheme, published July 2015, states: “When the scheme first commenced the average length of stay was approximately 4 years and at end 2014 had reduced to 1.9 years in private and in public facilities for those who had entered long-term residential care since the scheme commenced.” Nursing Homes Ireland have calculated that in June 2018 the average cost per week of private nursing home care in Kilkenny was €901, in Carlow €871, in Waterford €915 and Wexford €858. This is an average of €886 per week across the region. This will then allow you to calculate what sort of fund may be required to support yourself in a nursing home for a period of say 2 years today. €92,144. We can then reduce this by the state pension of €248.30 per week to give a total required fund of €86,184.
Now let us assume that you have just retired (age 65) and will not need this fund until you are 82 in 17 years. If we assume an inflation rate of just 3% by the time you are 82 you will need a fund of €142,449 plus the state pension to see you through 2 years.
Other things you will need to consider are where is the money and is it in a liquid form that can be accessed as required. There is no point in having the funds invested in a property or investment asset that not only could go up and down in value but that cannot be accessed as required either by you or your representatives.
While discussing your choices for your last years is difficult and costs are hard to calculate, if you do not plan you could leave yourself with limited choice and in a place that you do not want to be.
