Tag Archives: Ryerson University

Rising future costs of long-term care will cause financial risks: NIA’s Michael Nicin

The National Institute on Ageing at Ryerson University recently prepared a report entitled The Future Co$t of Long-Term Care in Canada. The report predicts long-term costs may more than triple by mid-century.

Save with SPP reached out to the NIA’s Executive Director, Michael Nicin, to ask a few questions about how future increased care costs will impact the finances of retired Canadians.

Q. Your study shows that the cost of long-term care will jump to $70 billion by 2050, from $22 billion today. That’s a more than 300% increase. Should pension plans and retirement programs be factoring this possible huge cost increase into their design so people can pay their share in the future?

Depending on the pension plan type and member profile, pensions already act as a bulwark against this type of late life expense. Indeed, one can argue that that the costs to individual Canadians and public coffers would be assisted by more widespread pension coverage.

The bigger financial risk applies to Canadians without a robust pension or sufficient personal savings.

A 2016 report by Richard Shillington, for example, shows that Canadians with pension coverage have significantly higher income than Canadians who don’t. In 2011, median income for senior families with pension income was $55,400, compared to $31,400 for households without pension income.

The same report shows that median personal savings for Canadians aged 55-64, without pension coverage, is only $3,000.

So, while all Canadians could put more income to good use, the bigger issue with respect to long-term care costs is the two-thirds of Canadians who have no pension coverage at all, and haven’t saved enough on their own. Herein lies the bigger personal and social risk on long-term care affordability.

Q. There is also an indication that the burden on unpaid caregivers (such as family members) may nearly double to eight hours a week. I think there are tax credits and so on for this work, but is that enough? Could other things be done to help the caregivers?

The federal government, and a number of provincial governments, have indeed acted to provide some level of support to caregivers – ranging from tax-credits and work-leave protection for employed caregivers.

Federally, for example, Canadians caring for eligible spouse or dependant over 18 years of age, can claim up to $6,883 annually. At the moment, however, the tax credit is non-refundable, and as such doesn’t help caregivers who have no reportable income.

Some provinces offer work-leave protection, respite programs, and other sources of support to caregivers. For a full assessment of government support programs, Dr. Samir Sinha’s report, Why Canada Needs to Better Care for Its Working Caregivers, provides a good overview.

The bigger picture painted in our report on the future costs of long-term care shows that additional support will certainly be needed, but the fundamental challenge will be the availability of Canadians to continue to provide the level of support we’ve seen historically. Younger baby boomers had fewer children than previous generations of Canadians, which may mean fewer available family members to provide care. Likewise, Canadian families live farther apart from each other, making it impractical to physically support older family members. Women have also typically provided the bulk of unpaid care, but with women increasingly entering the workforce, there will again be fewer traditional sources of unpaid care. Indeed, at this level, concern for caregivers extends beyond the seniors’ care spectrum; it increasingly will affect economic and personal productivity.

To start then, governments should look to expand existing programs for caregivers. The federal government can start by making the tax credit refundable.

Employers may also need to step-up. Caregivers often juggle work obligations with providing care. And for those that have to leave work, the employer suffers the loss of an employee and the employee loses income. Caregivers tell us that they would like more flexible work arrangements, for example, so they can step away from a full workload without sacrificing the job altogether.

Q. From personal experience, the cost of LTC even today is pretty high. Here in Ottawa, it is about $2,000 a month for a publicly funded long-term care spot and around $5K plus for a private nursing home. Does your research say anything about the expected future costs of such services so we can show it on an individual basis (might make it easier to understand).

Our projected costs are actually rather conservative, in that they show what the status quo will look like if extended to a larger, ageing population. But in discussions with experts and in reviewing Canadian and global literature, the big cost risk associated with the future of long-term care is labour. Personal Support Workers are the front lines of health professionals who care for seniors, in their own homes and in nursing homes. Canada is already facing a shortage of PSWs and isn’t alone. Globally, there’s a shortage of PSWs, which likely means that a short supply and high demand will increase labour costs over time. This could certainly implicate costs for Canadians in the future, as recruitment and retention become more difficult in an ageing world. In the medium and long-term, then costs for care in the home and in nursing homes may grow beyond our projections.

Q. Would increased government funding for additional “subsidized” spots help stave off a future crisis? What else can be done today to prepare us for the future?

The NIA structured these reports as a series of three. The first two look at the current state of long-term care and project costs into the future, if we don’t shift practices, funding methods, and other aspects of how we deliver care to an ageing population. The third and final paper of the series is in progress now. In the final report, we’re working with a broad range of experts, government officials, and other stakeholders to identify real and potential means of delivering better care as lower or more contained costs.

But looking at best practices around the world, the countries that seem to be doing better than Canada have flipped spending in recent years and decades, pouring more resources into home and community care, as opposed to building more nursing homes, which cost more to build in the first place, and typically cost more to operate.

Q. What results from this research surprised you the most, and why?

Amongst the eye-opening projections on the future cost of long-term care and the current lengths of waitlists for home and nursing care, we can’t lose site of the fact that Canadians are already living longer, healthier lives than ever before. Centenarians are the fastest growing cohort in Canada. This is an incredibly positive trend that’s worth noting and celebrating. In a sense, the challenges we face now and on the horizon are partially the result of great gains in population health and longevity. We’re living longer, healthier lives. That can be surprising to anyone whose job it is to focus on problems and solutions, as we do at the NIA.

We thank Michael Nicin for taking the time to answer our questions.

It’s clear that we can all expect long-term care costs will be more than they are today when, in the future, we need them. If you have a retirement arrangement at work, be sure you are contributing all that you can towards it. If you don’t, consider setting up your own savings program. The Saskatchewan Pension Plan offers an end-to-end way for your to turn savings into future income; check them out today.

Written by Martin Biefer
Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock. He and his wife live with their Shelties, Duncan and Phoebe, and cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22

2018 New Year’s Resolutions: Expert Promises

Well it’s that time again. We have a bright shiny New Year ahead of us and an opportunity to set goals and resolutions to make it the best possible year ever. Whether you are just starting out in your career, you are close to retirement or you have been retired for some time, it is helpful to think about what you want to accomplish and how you are going to meet these objectives.

My resolutions are to make more time to appreciate and enjoy every day as I ease into retirement. I also want to take more risks and develop new interests. Two of the retirement projects I have already embarked on are joining a community choir and serving on the board; and, taking courses in the Life Institute at Ryerson University. After all, as one of my good friends recently reminded me, most people do not run out of money, but they do run out of time!

Here in alphabetical order, are resolutions shared with me by eight blogger/writers who have either been interviewed for savewithspp.com or featured in our weekly Best from the Blogosphere plus two Saskatchewan Pension Plan team members.

  1. Doris Belland has a blog on her website Your Financial Launchpad . She is also the author of Protect Your Purse which includes lessons for women about how to avoid financial messes, stop emotional bankruptcies and take charge of their money. Belland has two resolutions for 2018. She explains:
  • I’m a voracious reader of finance books, but because of the sheer number that interest me, I go through them quickly. In 2018, I plan to slow down and implement more of the good ideas.
  • I will also reinforce good habits: monthly date nights with my husband to review our finances (with wine!), and weekly time-outs to review goals/results and pivot as needed. Habits are critical to success.
  1. Barry Choi is a Toronto-based personal finance and travel expert who frequently makes media appearances and blogs at Money We Have. He says, “My goal is to work less in 2018. I know this doesn’t sound like a resolution but over the last few years I’ve been working some insane hours and it’s time to cut back. The money has been great, but spending time with my family is more important.”
  1. Chris Enns who blogs at From Rags to Reasonable describes himself as an “opera-singing-financial-planning-farmboy.” In 2017 he struggled with balance. “Splitting my time (and money) between a growing financial planning practice and an opera career (not to mention all the other life stuff) can prove a little tricky,” he says. In 2018 he is hoping to really focus on efficiency. “How do I do what I do but better? How do I use my time and money in best possible way to maximize impact, enjoyment and sanity?”
  1. Lorne Marr is Director of Business Development at LSM Insurance. Marr has both financial and personal fitness goals. “I plan to max out my TFSAs, RRSPs and RESPs and review my investment mix every few days in the New Year,” he notes. “I also intend to get more sleep, workout 20 times in a month with a workout intensity of 8.5 out of 10 or higher and take two family vacations.”
  1. Avery Mrack is an Administrative Assistant at SPP. She and her husband both work full time and their boys are very busy in sports which means they often eat “on the run” or end up making something quick and eating on the couch.  “One of our resolutions for next year is to make at least one really good homemade dinner a week and ensure that every one must turn off their electronic devices and sit down to eat at the table together,” says Mrack.
  1. Stephen Neiszner is a Network Technician at SPP and he writes the monthly members’ bulletin. He is also a member of the executive board of Special Olympics (Kindersley and district). Neiszner’s New Year’s financial goals are to stop spending so much on nothing, to grow his savings account, and to help out more community charities and service groups by donating or volunteering. He would also like to put some extra money away for household expenses such as renovations and repairs.
  1. Kyle Prevost teaches high school business classes and blogs at Young and Thrifty. Prevost is not a big believer in making resolutions on January 1. He prefers to continuously adapt his goals throughout the year to live a healthier life, embrace professional development and save more. “If I had to pick a singular focus for 2018, I think my side business really stands out as an area for potential growth. The online world is full of opportunities and I need to find the right ones,” he says.
  1. Janine Rogan is a financial educator, CPA and blogger. Her two financial New Year’s resolutions are to rebalance her portfolio and digitize more of it. “My life is so hectic that I’m feeling that automating as much as I can will be helpful,” she says. “In addition, I’d like to increase the amount I’m giving back monetarily. I donate a lot of my time so I feel like it’s time to increase my charitable giving.”
  1. Ed Rempel is a CFP professional and a financial blogger at Unconventional Wisdom. He says on a personal finance level, his resolution are boring as he has been following a plan for years and is on track for all of his goals. His only goal is to invest the amount required by the plan. Professionally, he says, “I want 2018 be the year I hire a financial planner with the potential to be a future partner for my planning practice. I have hired a couple over the years, but not yet found the right person with the right fit and long-term vision.”
  1. Actuary Promod Sharma’s resolutions cover off five areas. He says:
  • For health, I’ll continue using the 7 Minute Workout app from Simple Design.
  • For wealth, I’ll start using a robo advisor (WealthBar). I’m not ready for ETFs.
  • For learning, I’ll get my Family Enterprise Advisor (FEA) designation to collaborate better in teams.
  • For sharing, I’ll make more videos.
  • For giving, I’ll continue volunteering.

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Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

Written by Sheryl Smolkin
Sheryl Smolkin LLB., LLM is a retired pension lawyer and President of Sheryl Smolkin & Associates Ltd. For over a decade, she has enjoyed a successful encore career as a freelance writer specializing in retirement, employee benefits and workplace issues. Sheryl and her husband Joel are empty-nesters, residing in Toronto with their cockapoo Rufus.

Oct 3: Best from the blogosphere

By Sheryl Smolkin

The leaves are turning and the weather is changing. As fall visits us briefly before the long cold winter sets in, it’s time to re-visit recent posts from some of our favourite personal finance writers.

On Boomer and Echo, Marie Engen offers 5 Ways To Stretch Your Retirement Dollars. My favourite is to sign up for senior discounts. In Calgary an annual transit pass for seniors is just $95. BC Ferries gives a 50% discount on passenger fares (Monday to Thursday, except holidays). Retailers such as Shoppers Drug Mart have senior discount days. A number of universities and colleges offer free tuition, at least for non-credit courses.

Sara Milton writes on Retire Happy about Financial warning signs: Are you prepared for the worst?. She says before financial disaster hits, there have  usually  been warning signs for some time. Just like on the dashboard of a car, an individual’s financial “check engine” light was lit up like a Christmas tree and, either he/she didn’t notice or  deliberately ignored it in the hope that it would somehow fix itself and switch off.

While investors may be reluctant to sell stocks because the sale will trigger tax inclusions, Pat McKeough reminds us on the Financial Independence Hub thatCapital gains tax is one of the lowest taxes you’ll ever pay. For example, if an investor purchases stock for $1,000 and then sells that stock for $2,000, they have a $1,000 capital gain. Investors pay Canadian capital gains tax on 50% of the capital gain amount. This means that if you earn $1,000 in capital gains, and you are in the highest tax bracket you will pay about $247.65 in Canadian capital gains tax on the $1,000 in gains.

For most young people in college or university student loans are a necessary evil. But they can become a tremendous burden after graduation. How I worked my way through university by Robin Taub on Forward Thinking profiles Corey Barss (age 25) who grew up in Brantford and attended Ryerson University. By saving money while he was in high school and working nearly full-time as a cook and server at the Ryerson campus pub while he was in university, he was able to graduate with only $30,000 in student loans. Even when he got a full-time job he continued work 12 hours/week at the pub in order to become debt free in three years.

And finally, the Globe and Mail’s Rob Carrick writes that one of the most important financial literacy lessons young people can learn is how to deal with banks. In Millennials, banks are not your friends his message to students is that banks aren’t your friend, and neither are they your enemy. They’re companies you do business with and that means you have to have to go in prepared to defend your own interests. He says students should look for ways to bank for nothing, and he gives  important factors to consider when evaluating student bank accounts.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.