The Financial Cost of Unseen Challenges and Sacrifices of Caregivers
A recent article by Channel NewsAsia revealed that a long-term illness like dementia carries a staggering and sustained financial cost. The study found the median monthly expense for caregivers is $2,000 – even after government subsidies. This isn’t a one-off expense; it’s a relentless drain on a family’s resources, month after month, year after year.
While our national CareShield Life provides a foundational safety net, the costs of care can easily exceed its payouts. This is precisely where a comprehensive Long-Term Care plan comes in. Such a plan doesn’t just focus on growing your wealth; it critically focuses on protecting your wealth by anticipating these risks, ensuring your family’s quality of life is maintained, no matter what happens.
The Difference a Plan Makes: The Lims’ Story
To truly understand the power of comprehensive planning, let’s look at the story of Mr. and Mrs. Lim. As a couple, they spent years diligently planning their retirement together—not just for growth, but for protection against life’s uncertainties.
Their foresight is put to the ultimate test when Mrs. Lim is diagnosed with early-onset dementia. It’s an emotionally devastating blow, but financially, they are prepared. Here’s what their plan looked like:
- Enhanced Long-Term Care Coverage: Years ago, both Mr. and Mrs. Lim made the crucial decision to supplement their basic CareShield Life policies. They opted for a private supplement that would increase their potential monthly payout from $600 to a more realistic $2,000.
- Safeguarding Their Retirement Nest Egg: This insurance decision was the cornerstone of their wealth protection strategy. By paying a predictable annual premium, they effectively transferred the enormous and unpredictable financial risk of long-term care to an insurer. This action safeguarded their joint retirement funds and investment portfolio, protecting their nest egg from the catastrophic cost of a long-term illness.
- Clear Instructions Through a Lasting Power of Attorney (LPA): While in good health, Mrs. Lim appointed her husband, Mr. Lim, as her ‘donee’ under an LPA. This gave him the legal authority to manage her personal welfare and financial affairs should she ever lose the capacity to do so.
When Mrs. Lim’s condition progresses and she requires professional care, their plan springs into action. The $2,000 monthly payout from her supplemented insurance policy activates, directly covering the cost of a trained caregiver and necessary medical supplies.
The benefits to Mr. Lim and their children are immediate and profound:
- Their Family’s Financial Future is Secure: Mr. Lim does not have to panic and sell their investments during a bad market or drain their joint retirement savings. The insurance handles the heavy financial lifting, just as it was designed to do. His own retirement remains secure, and the funds they had planned for their children are preserved.
- The Burden on the Caregiver is Eased: As her primary caregiver, Mr. Lim’s journey is emotionally taxing. However, the LPA removes any legal and administrative friction. He can seamlessly manage his wife’s accounts, insurance matters, and make timely healthcare decisions. This allows him to focus his energy on what truly matters: providing his wife with love, comfort, and the best possible care.
Because they planned ahead, the Lims are able to navigate one of life’s most difficult challenges with dignity and financial stability. Their plan delivers what matters most: peace of mind.
Practical Tips and How to Get Started
Thinking about this can be overwhelming, but getting started is simpler than you think.
Key things to take note of:
- Don’t just rely on the basic CareShield Life: Understand its payout amount and recognise that it’s designed to be a starting point. Evaluate if this is enough for your desired standard of care.
- Inflation is Your Enemy: The $2,000 monthly cost is based on today’s prices. The cost of healthcare and long-term care will only go up. Your plan needs to account for this.
- It’s Not Just About Money: A crucial part of your plan is the Lasting Power of Attorney (LPA). Do this while you are healthy.
- Caregiving is a “Job”: The article highlights the huge number of hours caregivers put in. This “unpaid work” has a real economic cost, often in the form of a lost career or income for the caregiver.
How to get started:
- Review Your Existing Coverage: Start by understanding your current CareShield Life or ElderShield coverage. You can check this on the CPF Board website.
- Have the “Tough Conversation”: Talk to your spouse and family about your wishes for future care.
- Assess the Financial Gap: Estimate your potential future care costs and compare that to your expected payouts from CareShield Life. The difference is your “gap.”
- Seek Professional Advice: This is where a financial adviser can add immense value in helping you navigate the different insurance supplements and integrate them into a holistic plan.
Source: Channel NewsAsia
The first step is simply acknowledging the risk. The responsible thing to do now is to act on that knowledge.
Let’s connect to build your Long-Term Care plan together.
Read Channel NewsAsia’s full article here.
Important: The information and opinions in this article are for general information purposes only. They should not be relied on as professional financial advice. Readers should seek unbiased financial advice that is customised to their specific financial objectives, situations & needs. This advertisement or publication has not been reviewed by the Monetary Authority of Singapore.
Published By:
Tan Ri'an 陈日安
Ri’an’s mission to elevate financial well-being often begins in the boardrooms and town halls of Singapore’s leading companies. His work promoting financial literacy across the workforce has given him a unique insight: the years leading up to retirement are when people need more than just information—they need a dedicated, trusted strategist.
This conviction is deeply personal. A family loss, which could have been mitigated with proper planning, inspired Ri’an’s career and is the reason he is so passionate about ensuring financial and estate plans provide genuine peace of mind during this critical life stage.
Ri’an understands the specific concerns that can keep you up at night. He specialises in simplifying the complex questions you now face: how to protect your hard-earned nest egg from market volatility, structure a reliable retirement income that outpaces inflation, and plan for future healthcare costs without becoming a burden on your loved ones. He helps clients confidently balance the responsibility of supporting their family with the absolute necessity of securing their own future.
His mission is to provide you with a well-researched, stress-tested roadmap that transforms retirement anxiety into a clear, actionable plan. Building lasting relationships on a foundation of trust and clear communication, Ri’an ensures you can feel secure and make informed choices for the future you’ve worked so hard to build.
Ready to navigate your retirement with confidence? Connect with Ri’an for a meaningful conversation.
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