Good to Great: How to Scale With an Outsourced CFO

When you start to look into aged care for yourself or for a loved one, you might be surprised by the high costs. It’s not uncommon for people to assume that the government subsidies will cover most or all of their aged care costs, but unfortunately, this isn’t true in most cases. 

The aged care industry is complicated, and people approaching difficult decisions regarding aged care find themselves confronted with a host of questions, including the following: why is aged care so expensive? It's an important question to ask and one you should be able to answer during your retirement planning.

 

It’s Labour Intensive

The aged care industry is labour intensive. It requires a multitude of different professionals, from health practitioners and physical therapists to cooks and facilities maintenance personnel. All of this labour is what makes aged care so appealing in one sense. As people grow older and they have a hard time taking care of their homes and personal needs, they can move into a facility in which all of these needs are taken care of. All of this labour adds up to high costs for residents, however, and the sticker shock can be discouraging.

 

Demand is High, Supply is Low

Australians are living longer and longer, so more people are spending more time in aged care facilities. In fact, the number of residents in aged care in Australia is expected to triple over the next 35 years. 

It can be difficult for industries to keep pace with such growth, and when demand is high and supply is low, prices increase for everyone.

 

The Fees Add Up

It would be easier to anticipate the costs of aged care if there was one set fee to calculate, but the fees vary, and there are many of them to keep track of. For instance, you’ll need to account for your accommodation deposits and charges, means-tested fees, daily fees, and fees for extra services. Some of these fees, such as the RAD, will be paid up front. Some may be paid in monthly instalments. Some fees are variable, but others, such as the standard daily care fee, are standardised.

 

Some Services Cost Extra

As you research aged care facilities, be sure to ask about extra services fees. Aged care facilities can charge extra for certain services, such as hairdressers, podiatrists, shuttle transportation, larger rooms, broader menu options, cable television, wine, day spas, and more. If you’re working with a tight budget, prioritise which services are most important to you, and don’t forget to include extra services in your budget calculations.

It can be very helpful to discuss aged care with your Wealth Management adviser. Even if aged care is years away, you can be better prepared when you understand the costs involved and plan accordingly. Feel free to reach out to us at Altus Financial if you have questions or concerns about how to fund the costs of aged care.