Quote:
Originally Posted by CaptainYooh
This 2022 Retirement Update Guide came up from JPMorgan Bank today, so I thought it was somewhat relevant to this thread. Even though it is aimed at the Americans, the points are relevant. In essence, people are expected to live longer and spending is expected to be quite a bit higher due to inflation, which means investing in only income stocks/bonds will not be enough. Also, an interesting observation about spending trend for people being highest in mid-fifties, then slowing down through 60s and 70s and then going sharply up in 80s, because of expensive health care and residence. This is believable. A family in their 80s we know, had to move to a retirement place here in Calgary and pay close to $10,000 per month in combined living costs. It is on a nicer side and they can afford it, but still, very expensive.
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I took over my parents’ finances recently due to dementia, and it has given me insight into retirement spending and finances. In their late 70s with their house long paid off and driving a reliable used car, they really didn’t spend much. Two people with full CPP and OAS is a decent base income. Add in another $1k a month each in RIFFs, and a modest defined benefit pension (<$1K), and they were doing fine. Look at how much money a lot of people saved during the pandemic due to lifestyle changes - that’s kinda what being retired in your 70s is like.
Going into a seniors home is very expensive*, but you presumably have the equity from selling your home to fund it. The problem is when one person needs care and the other doesn’t, and you’re paying for two places.
* Nice ones are around $5k/mo for a single person, somewhat less per person if it’s a couple. This is for seniors/retirement homes with full meals, health care providers on-hand, etc. Care home spaces, which are allocated for medical necessity, are around $2k/mo