Page 14 - Newcom

THE HEALTH FACTOR
Most retirement plans tout peace of mind. Proper health protection adds even more.
Cassandra Avis,
Product Specialist at GMS
survey found that 44 percent of Canadian employers don’t offer any retirement benefits, and another 10 percent have closed existing programs to new retirees.
Even provincial governments are cutting back—spending on health is the lowest it’s been in 17 years, according to the Canadian Institute for Health Information (CIHI). Although many provinces still have generous drug plans for seniors, other healthcare needs—including vision and dental care—become a retiree’s responsibility.
“After they retire, they’re going to [have] a much lower income all of a sudden and [won’t have] planned for glasses or hearing aids, or all those things that help us as we get older,” says Avis.
Would-be retirees have some idea of the upcoming burden. Respondents to a 2014 BMO Wealth Institute survey expect to spend over $5,000 a year on out- of-pocket healthcare costs during their retirement. But they may not realize just how fast those costs can rise.
Urgent or complicated care can compound expenses, Avis notes, pointing out that an ambulance trip can cost up to $1,200 in some provinces. “[What if] I break a hip and need to rent a wheelchair or crutches? We’re going to have expenditures that we didn’t have when we were in our forties.”
A seamless transition
How can Canadians prepare? They have options, says Avis, pointing
MOST CANADIANS HAVE A SPECIFIC VISION
OF RETIREMENT. They imagine more time with family, tropical getaways or a new focus on hobbies. Illness or medical emergencies usually aren’t part of the picture. And with so many other retirement planning factors to consider, neither is health insurance.
“They’re applying for government pensions, they’re planning their RRIFs,” says Cassandra Avis, product specialist at GMS (Group Medical Services). “There are so many bigger things on their minds that their benefits get lost in the shuffle.”
Only nine percent of Canadians factor health and related healthcare costs into their retirement plans, according to CIBC Wood Gundy. That oversight can be costly, but it doesn’t
have to be—especially if clients understand how health insurance plans can fill an important retirement planning gap.
Retirement’s new responsibilities
Even if a client’s retirement vision is consistent, the healthcare landscape in Canada isn’t. One of the biggest changes: the dwindling number of employers who offer post-retirement health benefits. A 2014 Aon Hewitt
SPECIAL INTEREST FEATURE