The most ignored aspect of retirement planning just might be that women live longer than men.
Among people aged 65, just over half are female. At 75 years of age, 57 per cent are female. At 85 years old, 68 per cent are women. These statistics were provided by Kristina Hidas of the Healthcare of Ontario Pension Plan (HOOPP), which has just completed some research showing one way in which the longer lifespans of women matter really need to be taken into account when retirement planning.
Women should expect to pay a lot more in their retirement years for long-term care, home care and other costs like dental care and drugs not covered by provincial programs. “Women are the most vulnerable group,” said Ms. Hidas, HOOPP’s senior manager of strategic research. “They live longer, and they mostly live by themselves.”
Everyone should think more about paying for health care in retirement and from their retirement savings, but especially women. Whether married or single, they need to plan for the likelihood that they will spend more of their lives than men at a stage where out-of-pocket health-care expenses may impact cash flow.
The cost of long-term care in particular tells the story. HOOPP’s research found that government-run nursing homes can cost $25,000 to $40,000 a year, while private assisted-living facilities might run $40,000 to $100,000 and home care plus related expenses like nursing could cost $35,000 annually.
The study also found that women are much more likely to live in nursing homes and seniors’ residences than men. At 85 and older, 14.1 per cent of women and 8.6 per cent of men live in a nursing home, while 17.1 per cent of women and 9.8 per cent of men live in a seniors’ residence. HOOPP’s Ms. Hidas said older men have a better chance of receiving care from a spouse than older women and thus don’t need institutional care as much. Women in retirement, often living alone, have no such support.
HOOPP’s study refers to a 2016 Canadian Life and Health Insurance Association survey that indicates nearly 75 per cent of people have made no accounting for long-term care costs in their retirement planning.