Abstract
Introduction: This paper examines the financial impact of entering aged care. Methods: Estimates of that impact are derived from estimates of the lifetime risk of entry to, the expected total length of stay in, and the annual private cost of, permanent residential care. Results: Almost half of women and a third of men aged 65 years will enter permanent residential care at some time in their remaining life. On average, of those who do enter, women will stay for 3.5 years, whereas men will stay for 2.3 years. For a part‐pensioner with annual income of $A30 000 and assets worth $A160 000, the financial impact of entering care would, on average, be $A52 600 for a woman and $A34 700 for a man. Conclusions: Retiring Australians face a considerable risk that they will require aged care during their remaining lifetime and that the private cost of that care will substantially impact on their finances.
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