Sep 13, 2026
Retirement was supposed to be an active, sunny chapter for Barrie, Ontario residents Marilyn and John Sehn. Leaving the workforce at 60, they envisioned decades spent on the tennis courts, in the pool and fleeing Canadian winters for warmer climates.
Instead, a severe health turn changed their trajectory. Twelve years into retirement, John received a rare neuromuscular diagnosis that made staying at home impossible. The couple made the tough decision to sell their house and move into a private retirement residence, where monthly living and care costs quickly escalated to $9,200, a figure far beyond their origina retirement plan.
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The Sehns' reality highlights a growing national challenge. With hundreds of thousands of Canadians requiring long-term support and demand surging over the next decade, unexpected healthcare costs can be the single biggest blind spot in modern retirement planning.
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Start preparing decades early
Don’t wait to have the healthcare conversations until a medical crisis occurs. Initiating discussions in your 50s or 60s allows for a clearer understanding of potential expenses, reducing emotional and financial stress down the road.
To build an effective strategy, there a few practical steps you can take:
- Envision future care: Visualize your daily life at age 85, considering potential mobility or health limitations. Defining the level of independence and support you desire helps determine the necessary savings target.
- Scenario modelling: Financial projections should test various outcomes starting around age 75 — evaluating best-case, worst-case, and average care requirements — to ensure funds remain intact regardless of how long care is needed.
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Funding strategies for long-term expenses
Covering complex healthcare costs usually requires blending several distinct financial streams. Government benefits like CPP and OAS, alongside private pensions and registered fund (RRIF) withdrawals, form the core foundation of a care budget.
Delaying CPP and OAS until age 70 can lock in significantly higher monthly payouts for life, while Tax-Free Savings Accounts (TFSAs) offer flexible, tax-exempt withdrawals for unexpected care expenses. For those seeking maximum certainty, annuities can provide a predictable, guaranteed income stream to cushion fluctuating costs.
Beyond traditional income, housing equity often plays a central role. Selling a primary home is frequently the most direct route to cover private retirement residence fees.
For couples who want to age in place — or where only one partner requires support — a reverse mortgage can unlock necessary cash flow without triggering taxable income that might claw back OAS benefits.
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Establishing a Home Equity Line of Credit (HELOC) well before leaving the workforce will also help support your retirement plans, since securing credit becomes exponentially harder once a senior has transitioned out of full-time employment.
Is private insurance practical?
While long-term care insurance exists, rising premium costs have made it a challenging option for many. Unlike life or disability coverage, premiums directly diminish everyday retirement savings.
Because individual care needs vary drastically — some retirees never require formal care, while others need it for years — many advisors suggest self-funding through personal investments and home equity rather than purchasing standalone policies in Canada’s smaller insurance market.
The realities of in-home care vs. retirement residences
Survey data indicates that an overwhelming majority of Canadians prefer to age in place. However, remaining at home can also bring significant unexpected expenses that need to be considered:
- In-home support costs: Personal support workers frequently charge between $30 and $45 an hour, which adds up quickly if daily or full-time care is required.
- Property modifications: Home renovations to accommodate wheelchairs or walkers add up-front costs, though government tax credits and senior property tax relief programs can help offset a portion of these expenditures.
- Private facility living: Private retirement residences offer comprehensive care but come at a high price point. Base rent and care packages can range anywhere from $3,000 to over $9,000 per month depending on room size and support level. Furthermore, residents must account for annual rent increases and ancillary charges for services and meals.
Government long-term care and wait times
Government-subsidized long-term care facilities offer a more affordable alternative because provincial funding covers medical care, leaving residents responsible only for accommodation fees. In provinces like Ontario, maximum monthly co-payments typically top out around $3,000 for private rooms, with subsidies available for lower-income applicants.
However, relying strictly on public facilities carries a major drawback: long waiting lists. With tens of thousands of seniors waiting for beds, placement can take years. As a result, families who cannot wait for a public spot are often forced to rely on private residences as an interim — and expensive — solution.
Looking ahead to your own future
As you map out your golden years, make sure your financial roadmap accounts for more than just the ideal lifestyle Marilyn and John originally envisioned. Factoring in the potential reality of healthcare needs — by researching local care costs early and building a cushion into your savings — ensures that if your health takes an unexpected turn, an unexpected $9,200 monthly bill won't compromise your hard-earned financial independence.
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Amy Tokic is an SEO content editor for Money.ca. She holds a B.A. in Communications from the University of Windsor. Amy is an award-winning author and has been writing professionally for 15 years, publishing articles in the lifestyle and health sectors.
