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Question

How much does retirement residence living cost?

 
Answer

The costs of retirement residence living vary greatly and are based on the level of care required, the meal plans and the amenities and activities available. Costs will vary from residence to residence (even within the same municipality) and range from $2,000 to $6,000 a month. Purchasing a condo is also becoming more prevalent and most start at $250,000 with additional monthly fees starting at about $1,500.

Question

What is long-term care insurance?

 
Answer

Long-term care insurance will provide tax-free benefits if you develop a critical and chronic illness and are unable to care for yourself. It may cover health and personal care services if you are living at home, in a retirement residence or long-term care facility. Different policies will reimburse for eligible expenses, a set amount for expenses on a given day or provide flexible income without the need of proving expenses.

Question

What is an annuity?

 
Answer

An annuity is an insurance product that can offer seniors periodic payments (usually monthly), based on their original investment, current interest rates and the terms of the contract. Non-registered annuities can be taxed at favourable rates. A straight life annuity will provide income for the duration of a lifetime. A joint life annuity will provide income for life for both spouses.

Question

How do I know what I can afford?

 
Answer

You may be able to afford more than you think. Retirement communities include many of the additional living costs you may already pay in their monthly fees. Also, if you live an independent lifestyle then many services can be purchased as you need them, keeping your overall expenses down. There are many financial strategies available that you could discuss with a professional financial advisor.

Question

Should I transfer my pension or reinvest it myself?

 
Answer

This is a good question and the answer has several sides. The technically correct answer depends on the economics of you particular plan as it relates to your investment strategy and expected return. To get that answer, you either need good spreadsheet and finance skills or you need to higher a consultant. Neither is likely practical for $6,500. You may be able to get some help from the HR department of you new employer. The practical answer is that if you broadly diversify your rollover IRA among a few low-cost index mutual funds, you should theoretically come out ahead of buying the extra years of credit. However, very few investors actually do this in the real world. Investors get too aggressive in good markets and too conservative in poor markets. Investors incur excessive fees and make lots of mistakes. In short, most investors would do better buying the extra service credit. So you must decide, are you among the few who will use a sensible, consistent, low-cost strategy over the remainder of your life? Or will you invest like most people and get terrible results? The answer to these questions will tell you what you should do.

Question

What monthly bills can I expect to receive?

 
Answer

Similar to household bills. There will be invoices for rent, phone, cable and medications. Any additional costs will come from the various care or housekeeping packages offered by the facility.

Recently Asked
 
Question

Should I transfer my pension or reinvest it myself?

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What monthly bills can I expect to receive?

Question

How much does retirement residence living cost?

Question

How do I know what I can afford?

Question

What is long-term care insurance?

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What is an annuity?



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