Since the start of 2024, at least four senior citizens known to me have suffered broken hips and had to do hip replacement surgeries. Among them is a member of my own family who now has the services of a caregiver.

The long-term care of the elderly impacts families, households, communities, and the nation, which brings into the spotlight the need in retirement planning for long-term care costs and arrangements. One’s health and welfare in old age are critical.

It’s often the case that health insurance and life insurance are discussed during retirement planning, but not enough thought goes into planning for ongoing care in retirement. As a senior citizen, you may not be able to live independently due to health and disability issues. Having the requisite financial resources helps provide comfortable living arrangements for retired seniors. Another factor often not considered is the responsibility of retired seniors for elderly parents or aged family members and in some instances grandchildren.

Just recently a retiree advised how she had to divert funds earmarked for investment to assist in the caregiving of her aged mother who recently underwent surgery for a broken hip and has since been relocated to a hospice. It will cost more for her medical care and assistance with the activities of her daily living, as she no longer resides in the family home. Her mother’s surgery was due to a fall at home.

Skilled professionals are now engaged in her long-term care but it’s important to note that long-term care is more than just health care. Therefore, health insurance is not sufficient to meet the various needs of the elderly. It goes beyond medical treatment and covers mobility, physical therapy, and daily activities such as eating, bathing, and assistance with taking medication.

According to the Statistical Institute of Jamaica, it is estimated that by the year 2050, the elderly will represent 22 per cent of the population. Studies, meanwhile, have showed that due to the strong family network in Jamaica, most of the elderly remain in their communities as they age as only about one per cent are in residential care facilities. The majority of those in nursing homes are 75 years and older. There is a decrease in the under-15-year-old population and an increase in the over-60-year-old population. These statistics are important for retirement planning. With nearly 80 per cent of the working population without a pension plan, urgent action is needed by the authorities and individuals themselves to address this issue as the population grows older. At the micro level workers should not just contribute to a pension plan but begin to invest in other assets for long-term retirement needs. With rising inflation, a pension income may prove insufficient to meet potential retirement needs. The importance of having streams of income in retirement cannot be overstated.

Let’s examine a particular health concern that was mentioned earlier. Hip fracture is considered a global public health concern. It affects mobility and leads to increased dependency on family or society. An international study involving researchers from the Harvard Business School revealed that the number of hip fractures globally is projected to double by 2050. It’s reported that a notable number of elderly patients who suffer from hip fractures do not receive sufficient treatment to prevent further fractures from occurring. This situation was noted in all countries globally. Because hip fracture often requires patients to be institutionalised, it can become a financial and social burden for patients and families.

In the United States the population aged 65 and over is expected to double by 2050. Information released from the US-based National Library of Medicine projected that one in every 12 men and one in every three women will suffer from a hip fracture at some time during their lifetime. It was reported that “86 per cent of hip fractures occurred in individuals aged 65 and over”. With an ageing population both locally and internationally, families should be mindful that long-term care costs can be very costly. It’s best to plan for any eventualities.

I also want to share with you a pleasant call I received from a retiree. He retired more than 20 years ago and is reaping the rewards of investing long term. It was 24 years ago that he invested half a million Jamaican dollars in an equity account which has now grown to more than $6 million, notwithstanding the last few years of decline in the stock market. This example underscores the importance of investing in stocks for the long haul to beat inflation and increase the purchasing power of money. He did not add or withdraw funds from this account.

I often stress to clients the importance of diversification. It simply means not keeping your eggs in one basket. Invest in different assets to meet short-term, medium-term, and long-term needs. This strategy has worked perfectly. A pension plan is a must-have when planning for retirement. It’s your source of replacement income. Now in his 80s, this client has invested for decades in retirement. Always remember when the pay cheques stop the bills will keep coming.

Grace G McLean is a financial advisor and retirement specialist at BPM Financial Limited. Contact her gmclean@bpmfinancial or visit the website: www.bpmfinancial.com. She is also a podcaster for Living Above Self. E-mail her at livingaboveself@gmail.com