"Planning financially for retirement requires taking many uncertainties into consideration. One of the greatest is the cost of health care.
Although some health-care costs are covered in Canada, there are many – ranging from medications and massages to nursing homes or at-home care – that need to be paid out of pocket.
“It’s the most difficult part of financial planning because there’s no way to know what [someone’s] health-care needs are going to be in the future,” says Rona Birenbaum, certified financial planner and founder of Toronto-based fee-for-service financial-planning firm Caring for Clients.
Health care is the biggest expenditure for people aged 65 and older, according to a 2018 Healthcare of Ontario Pension Plan study. That report cites a Canadian Life and Health Insurance Association Inc. (CLHIA) survey from 2016, which found that almost three-quarters of Canadians have made no provision for long-term care (LTC) costs in their retirement planning.
It’s also becoming less common for employers to have a benefit plan in place for retirees, according to a CLHIA spokesperson. Retirees can buy individual extended health-care plans as well as LTC or critical illness (CI) insurance, but experts note the costs go up considerably the older we get."