Galagher said aged-care requirements needed to be nutted out at the beginning of retirement, rather than "when care looms as an unwelcome necessity".
He said that while income needs decline in retirement, they fall further when in aged care, so that the need for capital to make a lump sum payment for aged care is likely.
"Typically, a bond for aged care is in the hundreds of thousands of dollars and will be needed for those who have a preferred care accommodation in mind," he said.
Galagher said the issue had been flagged earlier this week by the Minister for Ageing, Mark Butler, who said the aged-care system is struggling to meet demand, and that as aged-care needs increase the system may not be capable of meeting them.
Galagher said the government's response to the Productivity Commission report on aged-care reform would probably include changes to the financial arrangements that support aged care in Australia.
"Increased calls for those who can afford it to contribute more towards the cost of their aged care; the reduced ability of governments to provide publicly funded care; and a huge increase in the incidence of diseases such as dementia affecting the elderly, are all issues that retirees must consider if they are to manage their own future," he said.
Galagher said aged-care planning had a huge impact on retirement and estate planning. It should be discussed with family and financial advisers prior to the need arising, and developed in conjunction with a Will and power of attorney.
"Retirees may not be able to pass on their family home to their children, may need to set up a reverse mortgage, or not be able to set up the trust they had planned for their grandchildren's education," Galagher said.