“We realize that the aging of our society will provide a very severe impact on our future,” he says. “Absolutely it will hit every part of Canada and it will hit Ontario with
increasing force with every year that passes.
“This means that governments are under an enormous amount of burden to try to keep voters and these voters are turning to grey hair and turning to less healthy bodies over time. The ones that survive will someday be increasingly frail and will not want to live in poverty.”
According the report
, solving government debt problems requires bringing spending in line with income – the same tactic used for everyday households. It suggests limiting Ontario’s spending growth on programs to 4 per cent per year to return the province to financial security.
“The solution sounds simple, but the problem is very real. Ontario’s current financial trajectory is unsustainable. Serious curbs on spending growth may be uncomfortable now, but they will avert the possibility of a much worse budget crunch later on,” the report says.
In the meantime, Weatherdon recommends advisors focus on demographics, accounting for the long-term costs clients are likely to incur as they grow older, rather than the common flat-line retirement planning approach, such as here’s $3,000 a month, plus inflation, in retirement income.
“(Inflation) is meaningless to somebody who is 78 experiencing severe illness of her husband and needing to bring care in. She’s still well but when she is 84, and he’s already gone, she’s going to spend eight years in care, at $60,000 a year, which was not reflected in that advisor’s financial plan. It is a key, critical piece,” Weatherdon explains.
“We don’t know when we might get frail and ill and need extra personalized care – let it be in our 60s, 70s, 80s, certainly 90s. We know that at least half of us will experience significantly higher costs for an indefinite period of time,” he says.
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