As you get older, there are decisions to be made that will affect the rest of your life. In my youth, I made my share of silly financial mistakes, but now in my 70s, I can’t afford to have any missteps. Aged care planning is crucial and it’s complex. Bill Savellis, from Olive Grove Financial Advice, is a financial adviser and aged care specialist. He shares his expertise.
John Deeks: You helped your parents through their transition to aged care. Tell us about that.
Bill Savellis: I’ve been a financial planner since the early 2000s and I’ve been running my financial planning practice since 2008. My father was hit by a car walking the dog one day, sustained serious head injuries and required care from that point on. That kicked off the whole journey in terms of understanding what entitlements my father was due in terms of things such as home-care packages. We found it to be quite a challenging process.
That’s what got me started in understanding the whole home-care and aged-care sector. I learnt a lot from it and was then able to apply that knowledge to other clients. I decided to restructure my whole business, and focus exclusively on the elderly and predominantly on the aged care sector. I think that’s where I can do the greatest good.
JD: What’s most lacking? If you had a magic wand and could fix something, what would it be?
BS: The problem that I find with most people who come to me seeking aged care advice is that they leave it too late. Generally what happens is that I receive a phone call, usually from the kid, that mum or dad have had a fall, they’ve ended up in hospital and they’re all in a panic not knowing what to do. So if I had a magic wand, what I would do is I’d get people to start preparing for that much earlier in the retirement process.
People know that they have to deal with retirement planning. They know they need to get advice when it comes to the point of retirement, but they don’t appreciate that retirement looks different as you get older, and that you need to adjust your plans as you get older.
JD: You’ve said that there are three stages of retirement. Could you run through those, please?
BS: Sure. Obviously, there’s the early stages of retirement. This is where you’re transitioning from work to full retirement. People are still relatively young, they’re relatively active, they’ve got plans about travelling, they’ve got their retirement planned out. This is probably the most active part of their retirement.
The middle phase is when they start to slow down. They still have the ability to live independently, but they’re probably doing things a little bit more slowly. And this is where you might want to consider things such as home-care packages or maybe making some renovations to the home to give more support. For example, you probably can’t climb stairs as easily as you used to.
Then there’s the latest stages of retirement where you’ve basically lost your independence and you need support in order to maintain your day-to-day living.
Each point of retirement looks very different from a financial point of view, and you should get advice at each of those stages.
JD: You mentioned how emotional it is for when the kids ring to say mum or dad have had a fall. But what are some of the other major hurdles that you come across as a financial adviser when people are in the later stages of their life?
BS: When I get a phone call like that there are generally three concerns. The first question is, can mum or dad afford to go into aged care? That’s generally the biggest concern.
The second is, what does this mean for their Age Pension?
The third thing is mum and dad have worked their whole life to accumulate whatever assets they have. What does this mean for their assets going forward? Are all their assets going to disappear in fees when it comes to aged care, or are they going to have anything to pass on to the next generation?
My job is to help people get an answer to each of those questions and provide a strategy to help them maximise their financial situation.
JS: So what’s the take home?
BS: This is a space that’s going to change rapidly over the next few years. We’ve already seen the government indicate that the system isn’t working as efficiently as we need it to. There’s been some high-profile aged-care facilities that have closed down, because they just aren’t making a profit from this whole process. I suspect there’s going to be a lot of change over the next few years.
But people need to start planning in advance. Get in early, put a plan in place, get the whole family involved so everyone’s on board in terms of what needs to happen.
What happens when you become less mobile and can’t look after yourself? What’s the plan? Consider how home-care packages work. Have those discussions.
Have you or will you have those discussions well in advance? Share your thoughts in the comments section below
Also read: Reforms are producing an aged care supply crisis, provider warns