While your own retirement may be several decades away, your parents are probably closer to leaving their working years behind.
Retirement can prompt some awkward — but necessary — discussions between yourself and your parents, including a chat about the possibility of them spending their winters in a warmer climate.
If your parents aspire to join the snowbird ranks, they’ll need a plan. Fortunately, there are several areas where you can help them prepare.
1. Map out their snowbird budget
When planning expenses for a vacation home, while still maintaining a permanent home, your parents’ budget should account for duplicate expenses, such as:
- Dual mortgage payments, property taxes, HOA fees and homeowners’ insurance if they plan to own both homes
- Repairs, maintenance and upkeep for both homes
- Property management costs for either home when it’s not in use
Your parents should also be aware of what the current exchange rate is in their chosen destination. Look into how and where they can exchange their Canadian money for local currency. It may help to use a tool like a retirement cash flow calculator to get an accurate picture of their budget.
2. Cover the insurance basics
Snowbird insurance may help to fill the gaps in an existing health care policy.
There are several insurance needs snowbirds should be planning for, including:
- Health insurance
- Car insurance if they plan to have a vehicle at their vacation home
- Renter’s or homeowners’ insurance for their vacation residence
- Travel insurance
Generally, Canadians must continue to meet residency requirements to maintain their provincial health care policy. In British Columbia, for example, residents have to be physically present for at least six months out of the calendar year. If you or your parents aren’t sure what the requirements are, your provincial health department or health agency should have answers. You can find links to provincial and territorial departments here.
Snowbird insurance may help to fill the gaps in their existing health care policy. RBC Travel Insurance, for example, can offer coverage for emergency medical coverage or travel arrangements if a health emergency requires them to return home. When purchasing travel insurance, your parents should know what their policy will and won’t cover outside Canada.
They might also want to consider downloading the free PATH mobile app, which can provide even greater peace-of-mind while travelling, including easy access to local emergency services (ambulance, hospitals, police and fire).
You should also discuss finding a doctor if they need one while they’re away. Their primary care physician may be able to offer a referral but if not, you’ll want to spend some time helping your parents search for local doctors online.
3. Find ways to stay connected
It’s important to talk about how you plan to keep in touch. Will you schedule weekly phone calls? Video chat using apps like Google Duo or Skype? Send text and emails? Will they be able to use their mobile devices to get to Facebook or other social media accounts?
Take time to research:
- Wireless internet service at their vacation home
- Landline telephone service
- International cell phones to avoid pricey roaming charges
Making sure you have multiple ways to reach out can help avoid communication breakdowns.
4. Make sure your parents are getting social
Breaking the ice when you’re new to the area isn’t always easy. Before your parents make a move, encourage them to find ways to connect with others in their new winter hometown. That might include:
- Joining a Facebook or Meetup group for expats
- Visiting a local senior or rec centre, where they may also offer fitness classes
- Finding a church or other house of worship to attend
- Volunteering with a nonprofit
- Joining a membership group, like a local Kiwanis Club
- Checking local libraries for senior-focused activities
Casting the net as widely as possible may open up more opportunities to make new friends.
5. Create a contingency plan
Things don’t always go according to plan and while it may be unpleasant to think about, it’s important to consider what would happen if a parent were to pass away while in another country. Specifically, what would happen to their home or other assets and who would take care of their funeral arrangements? Ensuring your parents have an up-to-date Will (and possibly purchase life insurance) is the final piece of the snowbird planning puzzle. Having those safeguards in place can give you both some peace of mind about how to handle a tough situation if it arises.
Retirement planning for snowbirds encompasses a wide range of physical, financial and social needs. Starting the planning process before your parents retire gives you time to help them work out any potential kinks. And, it gives you an opportunity to craft a plan that can evolve to meet their changing needs over time.
Need help planning for your parents’ insurance needs while they’re away?
- Find an advisor
- Call 1-800-769-2568
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.