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PAM FRAMPTON: The high cost of living (long)

As the large cohort of millennials in Canada reaches their own senior years, many without pension plans, who will fund their care? —
As millennials in Canada reach their own senior years, many without pension plans, who will fund their care? — 123RF Stock Photo

When millennials reach their "golden age," many without a pension parachute, who will pay for their care?

On Fridays this month, The Telegram and other SaltWire Network daily papers have been running a Deep Dive series on seniors care.

From Cavendish, P.E.I. to Cavendish, Newfoundland, throughout Atlantic Canada and the rest of the country, there’s an aging population, some of whom need care, whether at home or in a nursing home or some other facility.

We pride ourselves on free health care in Canada, but of course it isn’t that simple.

Care for certain parts of the body — teeth, for example — isn’t covered by medicare and isn’t cheap, nor are things like hearing aids, eyeglasses and many other items needed for good health and quality of life.

And neither is long-term care.

People often ponder how much money they’ll need to retire, without considering that it might involve moving into an assisted living or full-fledged long-term care facility.

If you have a pension, the bulk of it could be needed for your care.

Ron MacNeill, a Prince Edward Islander who was featured in our series June 14, said his father pays $38,000 annually to live in a government-run long-term care facility, and the cost recently increased by 30 per cent. He shares the roughly 40-foot-square room, a closet and a bathroom with another person, and isn’t eligible for any government subsidy.

“We don’t regard long-term care as health care,” MacNeill said.

He says a person has to meet medical criteria to get accepted into long-term care, but we don’t treat it the same as hospital care.

“Now you have to pay for that,” he said.

But consider this: as more and more workplaces forego pension plans, and as  younger generations grapple to eke out a living that is often precarious in the so-called “gig” economy — working two or more jobs to stay afloat — we may have a larger issue on the horizon than the one we’re trying to adapt to now.

Even if you qualify for a government subsidy, it might take most of your monthly income to keep yourself housed and fed in long-term care.

In government-run long-term care in Newfoundland and Labrador, a person can be charged up to a maximum of $2,990 per month, with some or all of that being defrayed by a subsidy, depending on a person’s income. However, there is a waiting list for the subsidy, and that figure doesn’t include out-of-pocket expenses.

There’s been a lot of talk about the large cohort of senior citizens in Canadian society as baby boomers hit the age of 65 and over.

But consider this: as more and more workplaces forego pension plans, and as  younger generations grapple to eke out a living that is often precarious in the so-called “gig” economy — working two or more jobs to stay afloat — we may have a larger issue on the horizon than the one we’re trying to adapt to now.

Millennials make up 27.5 per cent of the population in Canada, nearly as large a cohort as the baby boomers (29 per cent).

As Vito Pilieci noted in his Feb. 6, 2019 article in The Ottawa Citizen, “Here’s what the numbers say about ‘screwed’ millennials,” the group faces higher housing costs, stagnant wages, a requisite to be highly educated and a workforce where many upper level positions are held by baby boomers not ready to retire.

“The millennial salary stagnation is also happening at a time when benefits, such as dental care and defined benefit pension plans, are being pared back or even eliminated by employers, giving those older generations an even bigger financial leg up,” Pilieci writes.

Without pensions and with less ability to save for the future, millennials may find themselves in a system of seniors care that is more cash-strapped and in higher demand than the one we have now.

According to a national survey of millennials done in the U.S. in 2015, more than two thirds of respondents underestimated the amount of money they could survive on in retirement.

The survey found that “15 per cent of millennials include winning the lottery as part of their retirement strategy, and 11 per cent expect to be gifted money for retirement.”

According to a Canadian survey in 2018, and following a similar trend in the United States, a growing number of millennials are currently in caregiver roles, looking after their parents or grandparents.

When the time comes, who will look after them?

And who will cover the costs?

Read the series: Caring for seniors

Pam Frampton is The Telegram’s managing editor. Email pamela.frampton@thetelegram.com. Twitter: pam_frampton


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