Trustees warned on unexpected ‘toll’ of aged care
One financial planner has said some SMSF trustees are underestimating the growing cost of aged care and the strain it will place on their finances.
Some baby boomers are expecting to fund their retirement via inheritances from their parents, according to director of FMS Group Christine Hornery.
“I believe the cost of aged care, even after the introduction of the 'Living Longer, Living Better' reforms this month, may eat its way into those inheritances, potentially putting baby boomers into a worse financial position in retirement than their parents,” Ms Hornery said.
Ms Hornery said investors are underestimating the growing cost of aged care and the “toll it may take on expected inheritances”.
“The minimum daily fee for aged care from 1 July 2014 is $46.50 per day,” she said.
“Along with other costs that may be incurred - for example, accommodation payment or contribution, means-tested fee, additional services fee… chances are [that] expected inheritances are going to be less than baby boomers expect or, given we are all living longer, may be so long coming they do not arrive when they are needed most.”