Why your retirement plan needs a reality check
When planning for retirement, you may want to hear that you’ll need X amount of funds. A verified number, a goal to reach for, a certainty that you’ll have enough.
But like most things in life, your later years are not set in stone. The amount of help or care that you’ll need or want can’t be perfectly predicted. Health status changes, support systems shift, markets fluctuate and housing rates rise or fall.
The conversation around saving for eldercare then moves from a quantitative space to more of a qualitative space, said Carol Fensom, a chartered financial analyst and senior financial consultant at MD Management Limited and a senior portfolio manager at MD Private Investment Counsel.
As a financial planner, Fenson works with clients to decipher their needs, wants and wishes when it comes to eldercare. She asks about what is important to your family, what longevity are you planning for, what is your health history and what matters to your family.
Because costs may be hard to predict 10, 15, 25 years in the future, “The conversation is less around healthcare costs and more around building a retirement plan that remains resilient regardless of the health events that occur,” Fensom said. “What we try to do is shift the focus from uncertainty to preparedness.”
While it’s difficult to pinpoint how much is enough when there are so many unknown variables, it helps to have some ballpark of the costs as they are today.
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Canadian eldercare specialists believe many people aren’t saving enough for future expenditures. Amy Friesen said that she had to convince her own financial planner that their goal was too low. Friesen is founder of Tea & Toast in Ottawa, a company that assists seniors and families navigating the eldercare system and transitions, and author of the book Bread Crumbs: From Home Care to Care Homes, a guide through the eldercare journey for families.
“Doctors probably don’t need to hear this, but generally speaking, try to be proactive rather than reactive,” said Stephanie Chan, founder and owner of Home to Home in Vancouver, a company that helps seniors and families plan for care, manage care and transition into care. “Most people wait until it is too late.”
Forgotten costs of aging at home
As you’re considering retirement spending, be prepared to pay privately for many services. In the early days, prepare to pay privately for help with housekeeping, meal preparation, yard work, home maintenance. You might need renovations to your home to ensure you can stay safe as you age.
“The thing that I wish everyone would consider is the cost of care as they age and not be so reliant or expecting that the government healthcare system is going to cover everything, because it does not,” Chan said.
Provincial and territorial healthcare systems will pay for some home care if the person qualifies. That may come with inconveniences, like having different personal support workers (PSWs) or nursing staff arriving each time, which can be disruptive and confusing. Chan said this makes some of her clients opt for privately paid home care or support.
If paying privately in Ontario, a PSW visit to the home costs from $38 to $45 an hour, often with minimum visits of three to four hours, said Peg Bocci, the founder of Silver Lining Senior Advisors and principal of Moving Seniors Lovingly, both of which serve seniors in the Greater Toronto Area (GTA). That’s $114 to $180 a visit, and many seniors will need more than one visit a week.
Getting to know the eldercare industry
Provinces and territories have different terminologies for the stages of eldercare. Generally speaking, assisted living is where you live in a place where you get meals and housekeeping and may get added care if you need it. These are called retirement homes in Ontario, retirement living in B.C. Long-term care is when you have more complex needs and require unscheduled 24-hour nursing on-site. These are called long-term care homes or nursing homes.
Retirement homes
Aging at home can become too costly if your healthcare needs necessitate more and more home care, or aging in place may become too much for those helping you. It may make financial, medical and/or psychological sense to move into a retirement residence.
The big variables in price for this stage of eldercare are location, suite size and level of care needed.
In an assisted living residence in the nicest neighbourhood of Vancouver, accommodation may be $10,000 a month, but in Vancouver’s suburbs it could be $8,000 a month for a similar level of care, Chan said.
In the GTA, Bocci said that accommodation fees range from $3,500 to $4,000 for a studio suite; $4,500 to $6,000 for a one-bedroom suite, and $7,000 to $10,000 for a two-bedroom suite, depending on the square footage. This is similar to price ranges Friesen quoted for Ottawa. A quick check suggests price ranges may be equivalent in Alberta’s urban centres, but those in Quebec may be cheaper.
Supply and demand in a certain area can also impact price. Bocci noted that retirement homes in other parts of southern Ontario might be more expensive than the Greater Toronto Area because fewer homes are available for a large aging population.
Add-ons
Beyond the accommodation fees are add-ons, like cable TV, parking, tenant insurance, etc. Some retirement homes are passing the cost of having a physician attached to the home to the residents.
Be prepared to pay a second occupancy fee if you’re going to share the space with a spouse, relative or friend. Friesen said many people are surprised with this cost, which often runs about an added $1,000 a month to cover the meals and services for that second person in the same suite.
When it comes to the cost of care, some homes offer a package with different levels of assistance, where in other homes you pay just for the assistance you need, or à la carte pricing. What is the most economical depends on the level of care that you need. In her 2024 book, Friesen outlines different scenarios and their pricing. For example, a senior who needs assistance with morning and evening care, a bath twice a week, medication distribution and an escort to meals can expect to pay between $650 (à la carte with government subsidy) to $3,200 (packaged with no government subsidy) a month in care services alone. That is above the cost of accommodation.
Long-term care
Long-term care, for people who have high needs and require on-site, unscheduled nursing care 24 hours a day, is subsidized in all provinces and territories.
In Ontario, residents pay a certain fee based on the type of room they occupy and their income at the time (e.g., not the amount in the bank). In 2026, a person who has a private room will pay $3,041.97 a month. The rate is similar in Nova Scotia and other provinces and territories. Basic rooms are available at a lower rate if a person has a lower income (less than $27,338 a year).
Wait times are currently long in many long-term care homes across Canada. Friesen warns people not to expect that they will have access to subsidized long-term care when they need it; plan to pay privately just in case you don’t get a spot. Paying privately means getting extra care in an assisted living or retirement home, costs that could double your monthly bill.
Once in long-term care, or assisted living with additional care, don’t plan your finances for just a short stay. Someone could be in long-term care for more than a decade, if they’re in an environment where they can thrive within their capabilities, Chan noted.
How will costs change?
Another way to estimate costs as they are now is to use the Cost of Aging Calculator, developed by the National Institute on Aging at Toronto Metropolitan University. It allows you to enter the region and also if you want to live a modest, moderate or comfortable lifestyle.
After you have an idea of the costs in 2026, how might they change in the future?
“Every year there are increases in the industry in both the accommodation fee as well as the care,” Bocci said. The rise in accommodation fees is usually between 2% and 4% a year.
Advocates are pushing for changes in eldercare in Canada, with higher pay for PSWs, more subsidized home care, and better eldercare facilities to give everyone the ability to “age in the right place,” as André Picard, health columnist for the Globe and Mail, says. All these may change the cost and offerings of eldercare in Canada, although that’s too malleable a possibility to impact your savings strategy.
Fensom suggests working with a financial planner or advisor who knows physician finances, someone who knows how to ask the right questions, find the blind spots and unlock their clients’ relationship with money and aging as they experienced it with their own families.
“There isn’t a formula. It’s going to be unique for every individual and they need to start that conversation and ask the questions.”
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