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Once you turn 65, there's a chance you'll need some form of long-term care. Unfortunately, this care isn't cheap.

Government-subsidized facilities set daily rates, but if you want a private or semi-private room in a non-subsidized home, costs can climb quickly. For instance, a 2022 study on private long-term care, released by Sun Life Financial (1), found that a private room in a non-subsidized facility can cost Canadians $6,000 or more per month.

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Given the exorbitant cost of long-term care, many pre- and post-retirees wonder if they should stop saving for retirement and start saving for a“nice” nursing home, instead. But how much should you save? And for how long?

To answer these questions, it's best to first understand what costs you may face.

How much do nursing homes in Canada cost now?

Let's assume you are a 62-year-old pre-retiree. As the anxiety of age-related costs starts to build, it's a good idea to see what care will cost across the country - and it turns out that the cost of a private room in a Canadian long-term care facility that is partially subsidized by the government varies widely by province:

• In Ontario, the maximum monthly rate for a long-term care home is about $2,085 for basic accommodation and $2,979 for private accommodation (2).
• In Alberta, continuing care accommodation charges run from $2,019 for a shared room to $2,759 per month for a private room (3).
• In the Northwest Territories rates for long-term care are among the lowest in the country at $897 per month, while British Columbia and New Brunswick trend higher from $3,574 to $4,723, respectively (4).

Assisted-living style residences, where residents still have some independence, typically range from $1,600 to $6,270 per month, depending on services and location.

What about government coverage?

Long-term care is partially subsidized by provinces in Canada. Here's how it works:

• The provincial government sets daily room and board rates in long-term care homes. Residents contribute a co-pay amount, and the government covers the rest.
• Eligibility usually requires a health needs assessment. For example, in Ontario, seniors must demonstrate they need 24-hour nursing or personal care.
• Even in subsidized homes, you'll have to pay extra for a private room, additional amenities, newer beds or upgraded meals.

For those retirees looking for a top-tier experience, keep in mind that your savings will need to be significant to cover the ongoing costs.

Read more: Here are 5 expenses that Canadians (almost) always overpay for - and very quickly regret. How many are hurting you?

How much will it cost 20 years from now?

One of the biggest challenges is predicting future costs. For instance, if the cost of a private room was $6,000 per month in 2025, and that cost was to grow by 6% each year, then 20 years from now that same resident would be paying just over $25,750 per month - or over $309,000 per year. At this rate, a resident could easily spend $1 million on care - in the future.

Thankfully, care facility rates do not increase quite that dramatically. Still, to cover the cost of future price growth, many Canadian financial planners recommend building in an inflationary increase of 5% when building a long-term care savings plan.

With this in mind, it's best to start saving as soon as you can for a quality residence. EQ Bank offers a Retirement Savings Plan (RSP) that boasts a 1.50% interest rate on your cash savings. Plus, contributions and investment growth are both tax-deferred, so you can reduce your taxable income now and only pay tax when you withdraw at retirement.

If you want to build additional wealth alongside your retirement living fund, a discount brokerage account can be a good place to start.

With CIBC Investor's Edge you can automate your investments through a Regular Investment Plan (RIP). With a RIP you automatically deposit funds from your bank account into your Investor's Edge account on a pre-set schedule to take advantage of dollar cost averaging.

Even better, CIBC Investors' Edge offers low commissions on trades and no or minimal account maintenance charges, depending on the size of your portfolio.

How to financially prepare for long-term care in retirement

Here are a few strategies to consider:

• Liquidate assets: A Money Wise Institute poll (5) found that 27% of Canadians adjust their estate plans due to rising healthcare costs. Selling a home often covers a large portion of care costs. CPP, OAS, and pension income can also offset expenses.
• Work with an elder law or estate-planning lawyer: They can help structure assets to ensure eligibility for provincial subsidies while preserving family wealth.
• Consider long-term care insurance: In Canada, long-term care policies can help cover either in-facility or in-home care, though premiums rise with age.
• Explore alternatives: In-home nurses, retirement residences, or smaller group homes can sometimes provide more affordable care and may improve quality of life compared to an institutional setting.

If you're a 62-year-old and want to guarantee access to a high-quality, private long-term care facility in Canada, you may need to plan for seven-figure costs over a multi-year stay. Provincial subsidies may cover the basics, but savings will be critical for more comfortable options.

Preparing now means you'll have options later on in life, whether your future includes a long-term care home, a retirement residence, or care at home.

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Article sources

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

Sun Life Financial (1 ); The Province of Ontario (2 ); The Province of Alberta (3 ); Senior Site (4 ); The Money Wise Institute (5 )

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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