How to Manage Financially in Retirement When you Get Sick
More and more Australians are self-funded retirees, relying on their investments and superannuation to get them through their retirement years. But ill health as you get older can certainly impact on managing your finances. Therefore maintaining a certain way of life can be impacted.
With planning and preparation, you can still get through those difficult times of compromised health status while managing financially.
Commonwealth Seniors Health Care Card
A Commonwealth Seniors Health Care Card is very beneficial if you’re retired and you get unwell. Seniors who aren’t eligible for a pensioner concession card can still apply for a seniors’ health care card. To be eligible for a Commonwealth seniors’ health care card, you’ll still need to meet certain eligibility criteria. You’ll need to meet the criteria applied to an income test.
With a health care card you get entitlements and concessions with pharmaceuticals under the Pharmaceuticals Benefit Scheme (PBS). There’s also discounts on services such as utility bills, so it’s definitely worth applying for. And if you hold a health care card, there are many health professionals who offer bulk billing or discounts.
To be eligible for a seniors’ health care card you’ll have reached the aged pension age criteria and have an adjusted taxable income not exceeding $54,929 per annum for a single person. A couple can earn an adjusted taxable income of $87,884 per annum if residing together. If you’re separated due to illness or respite care, the adjustable taxable income increases to $109,858 per year. These income limits are current as of 20thSeptember 2018.
Private Health Insurance
Not everybody can afford private health insurance. If you can, it will give you a sense of security in relation to your health as you age. Private health insurance gives you peace of mind that your health care needs will get seen too without going through long waiting lists. But it also provides choices in which health professional you use, where you’re treated and how you receive treatment.
Be sure to check your health insurance policy and ensure that you’re covered for age related conditions such as hip replacements, cataracts, and other health issues. And check your extras cover too. Whether it’s making sure that you’re covered for Optometry, Dental or Podiatry, make sure you have the cover that you need or may need in the future.
Financial Planners/ Accountants
When you’re sick, your finances are often neglected. To avoid receiving debt collection letters or having your electricity disconnected (as an example), you can set-up direct debit payments at any time to avoid these issues in the case of a sudden health crisis. Most bills can be paid via direct debit. If you have shares, property investments and rent as income, you might look to a finance professional to oversee your accounts. Whatever the case is for you, planning for the unexpected is a good idea when everything is going well.
Enduring Power of Attorney
Many of us don’t think of ourselves as ever being in a position where we won’t be able to manage. However, the time might come when you need a trusted person to act on your behalf for financial and health care decisions. The legal way for going about this is through an enduring power of attorney (EPOA) document. You can prepare an EPOA document yourself, or you can choose to have a solicitor prepare it for you.
In the case that you don’t have anyone that you’d be comfortable appointing as EPOA, there’s options. You can apply to the Public Guardian in your state. They can protect your rights if your cognition is impaired in regards to personal matters. You can also apply to the Public Trustee to appoint them as your EPOA for financial matters.
Car Insurance/ Travel Insurance
Often retirees are travelling around the countryside or abroad. If you fall ill during this time there are other financial considerations to think about. Planning and preparing for the unexpected will make this time easier if it comes around. Talk with your car insurance company. It could be costly and challenging to have a vehicle returned to your residence if there’s a health crisis while travelling.
Also make sure that if you’re travelling overseas, on a cruise or even within Australia, that you have the right travel insurance. Things to consider are whether your travel insurance will cover you for the following:
- Hospital stay, including surgery
- Transportation (e.g. being helicoptered off a cruise ship to a hospital)
- Medications associated with your treatment
- Accidents that occur while you’re travelling such as a ski accident.
Ill health and the Financial Impact on Others
It’s important to consider the financial impact that illness will have on your partner and loved ones if you fall ill. Is your partner able to manage the finances if you can’t? Will you both be able to live on the adjusted income if you’re no longer able to earn anymore? It could be that you need to go into permanent care, and your partner could still be employed. Is this you? Can you keep the family home or will it have to be sold?
If your care needs increase over time, you could need extra support in an aged care home or at your home. To access permanent residential care, the Government requires you to have an assessment with the Aged Care Assessment Team (ACAT).
For many people who fall ill though, they’ll often require flexible care or in home care rather than permanent residential care. To receive a subsidy from the government for flexible care or in home care via a home care package, you’ll need to meet the ACAT assessment criteria for approval of services. Receiving care without a subsidy can be really expensive, so it’s definitely worth contacting My Aged Care to arrange a meeting with an assessor to determine your eligibility. If you’re in hospital and you’ll need extra support after discharge, a discharge coordinator or social worker can arrange an ACAT assessment for you.
With all of this in mind, it appears that it’s never too early to consider your finances and set up support structures in the event of a health scare as you get older.