A financial wellness coach recommends factoring frail-care expenses into retirement plans after a reader shared subsidizing their mother's R30,000 monthly facility costs. With one in 10 people likely reaching 100, proactive planning can prevent children from facing similar burdens. Options include dedicated investment funds and specialized annuities.
In a recent advice column, independent financial adviser Kenny Meiring addresses a common retirement challenge: ensuring elderly care does not strain family finances. The query stems from a reader who recently placed their mother in a frail-care facility costing R30,000 a month, exceeding her pension and requiring personal subsidies. Meiring emphasizes that 'one in 10 of us is likely to live to 100,' making frail care a probable need.
Meiring advises incorporating three key elements beyond standard living expenses in retirement planning: a travel budget up to age 80 for visiting family; escalating medical aid premiums; and a frail-care allocation from age 85. This buffer allows for home care or assisted living without relying on children, even if formal facilities are avoided.
Practical strategies include creating a separate 'frail-care fund' investment bucket for aggressive growth, given its long-term horizon. Another option is a voluntary life annuity, which converts a lump sum into lifelong income. For instance, investing R1-million at age 85 could yield about R14,000 monthly, increasing by 5% annually—though buyers must be under 90. Retirees with living annuities can convert portions later for more predictable, higher income streams, though these cease on death without inheritance unless joint-life options are chosen.
For pre-retirement protection, Meiring highlights functional impairment disability cover, which pays out for loss of independence in daily activities like dressing or bathing. A quote for a 59-year-old seeking R30,000 monthly inflation-linked cover showed premiums at R2,000 a month, with a maximum entry age of 60. He also urges open discussions with children to ease anxieties.
Meiring, contactable at 082 856 0348 or financialwellnesscoach.co.za, stresses these steps preserve independence and family harmony.