Saving thousands of dollars per annum.
Sally needs residential aged care & her husband Pul remains at home. The aged care facility requires a $590K Accommodation payment, & they have about the same amount of money invested.
Paul is worried that IF he uses their savings to pay the Accommodation Payment as a RAD (Lump sum) that there would be no income for him to live on, & so he thinks that paying the DAP (ie the daily interest charge) would be better for them.
Once again, many people only look at part of the picture, because they don’t understand how it all works.
We did an “Aged Care Options” appointment, which explained how aged care works & how Centrelink pensions work, we then showed Paul what all his options are & how they apply to him, & then did financial modelling to show him the outcome.
We proved to Paul, that in their case, they were far better off to use their savings to pay the accommodation payment as a RAD, & by doing so increased their Age Pension entitlement from $22,000pa to $45,000pa, & reduced the aged care costs from $54,500pa down to $19,600pa. Consequently, by using their investments they will now have a cash flow surplus of $9,763pa (so their bank balance will grow by $9,763pa) instead of a cash flow shortfall of $15,575pa which would have been the case if paul had retained his investments as he was planning to do, (ie their savings would have eroded by $15,575pa. ie we saved Paul & Sally $25,338pa.
If you want to see if it is possible to save money for someone moving into care, why not call us to have an initial consultation, no cost or obligation for the initial consultation, & it could save you a lot of money, just like Paul & Sally