Let�s Talk Personal Finances With Seniors

Janet Grey Either you are a senior or you know someone who is. “In 2014, over six million Canadians were aged 65 or older, representing 15.6 per cent of Canada’s population. By 2030, seniors will number over 9.5 million and make up 23 per cent of Canadians. Additionally, by 2036, the average life expectancy at birth for women will rise to 86.2 years from the current 84.2 and to 82.9 years from the current 80 for men.”¹

Add to that, the increasing challenge of dementia, a disease that doesn’t just impact seniors. “As of today, there are over half a million Canadians living with dementia - plus about 25,000 new cases diagnosed every year. By 2031, that number is expected to rise to 937,000, an increase of 66 per cent. Of those over age 65 with dementia, 65% are women.”²

Now think of seniors and their personal finances. Many seniors, of course, can manage their financial affairs very well for a long time. But sometimes they can’t and we (their children and friends) may not notice right away that they are starting to struggle. What can we do to reduce their stress and to minimize errors and oversights while respecting their dignity and independence?

Start by putting yourself in their place. You might feel judged or awkward if someone asks questions about your personal finances that you have always proudly kept private. There could be feelings of shame, guilt, denial, paranoia or of being judged. So, the first step is to more closely observe if they need assistance. Are they disorganized with financial papers scattered everywhere? Are they missing key deadlines for tax returns and bill payments? Do they have a current understanding of their financial situation?

Choose a private moment to start this ongoing conversation. Don’t try to discuss this over a family holiday dinner. Keep your tone respectful, and be patient and non- judgemental. If this isn’t a good time, try again at another opportunity.

It’s not always easy for parents to see the roles reversed where the child is assisting the parent. You may encounter resistance and reluctance to give up their independence and face a new reality.

Be aware of their financial literacy and if helpful, keep your vocabulary easy to understand without use of acronyms and lingo. Many seniors also have hearing challenges so use your “outdoor” voice as needed. Let them decide what level of detail they want to share. Don’t try to do it all for them. Assist but don’t take over. Allow them to do what they can.

If you are speaking to a family senior, check with your other family members and siblings first to see if they have had any conversations on this topic and to learn the results of the discussion. The senior does not want to feel bombarded by everyone asking the same questions. Choose one person to have the conversation and bring the other members in as needed and use the tag team method. Each situation and family dynamic are unique—patience is key. Your senior may be in a couple relationship so ensure (if agreed) to include both in your discussion.

Sometimes it helps to speak in the third party. Example: “My neighbour Bob missed his tax return deadline and had to pay a penalty and interest. Did you get yours done in time?” This approach removes the harshness and judgemental tone of the question and reduces the defensiveness of the answer.

After you have a good sense of the need, ask how you can help. Maybe it’s too personal if you do their tax return, but you can help them gather the documents and take them to a third party to prepare the tax return.

You can help set up direct payment from the bank account for their bills like property taxes, utilities and even credit card payments. In the beginning, you may need to sit with them monthly while they write the bill payment cheques until they feel more comfortable to do things a new and different way.

Talk to them about their current cash flow. Do they have enough to cover their lifestyle needs?

Many seniors have savings and investments scattered in different accounts so it’s also a good idea to streamline finances. With fewer accounts, it makes it easier for them as they get older, as well as for anyone helping them. Speak to them about the options available and the level of involvement they want to have around these accounts.

Assist or create one overall document that lists all financial information with names and numbers of bank and investment accounts, insurance policies, bills that need to be paid, outstanding debts. Also list all sources of income including account numbers of pensions etc. If there are online accounts, list the passwords. Place this document in a locked box and tell the senior’s trusted person where the key is in case of emergency. Note-regardless of age, everyone should do this.

Are they receiving all the income they are eligible for like Canada Pension Plan and Old Age Security/ Guaranteed Income Supplement?

Check with their tax return preparer that all eligible tax credits and deductions are being applied.

Has your senior thought about future financial needs like health care, living arrangements? It’s better to be pro-active about these issues than to deal with in a crisis situation. Again, use the third-party approach. Example: “My friend’s mother had a stroke and needed to go and live in a seniors’ residence where she could get assistance. Have you thought about what you might do if that situation happened to you?” Then offer to accompany them to visit (with no obligation to pick one) several choices of residences to narrow down the list when the time comes. This also helps in future financial planning so you know what expenses to expect or what will be affordable.

Seniors are more comfortable than many when speaking of death. They have lost family and friends and it’s a common topic. But they often don’t like talking about their own death, especially with their own immediate family members. It’s a good idea for everyone (not just seniors) to let others know what their end of life and funeral wants are. You can pre-plan and/or pre-pay your funeral choices and expenses. Today there are so many options that it’s important to have this conversation and to review the options now in order to respect their wishes at a chaotic and emotional time later.

Does your senior have their legal items in order? A current Will and Power of Attorney agreements are vital to a clear estate settlement and handling of living issues if incapacitated. Without those items in place, family and friends may need legal help (and expenses) to act on behalf of their senior or the senior’s estate.

Couples will often name one another for these roles, but as they get older, it’s advisable for a younger family member, such as an adult child, to also take on that responsibility. It is best if that person is locally based for knowledge of the area and timely response. Some seniors may live alone and/or distant from family. There are professionals such as lawyers and trust companies that will act in that capacity for a specific fee.

Chat with your senior about the increase of senior fraud and scams. Are there actions you can take to help prevent this for them? Not all seniors are tech savvy and some that are still get caught in these illegal schemes. Among the most common: phone calls from someone claiming to be from the Canada Revenue Agency (CRA) or other “official” agencies asking for credit card or bank information, and people claiming to be calling on behalf of grandchildren who are in trouble. Provide them tips on what to do if they receive such a call.

If you are the Power of Attorney of Property for a senior, make sure you keep a record of the financial transactions you have made on their behalf. Always keep your finances separate from theirs and maintain clear records. Keep receipts for all purchases you make and inform other family members/siblings what you are doing and consult them before making decisions. Incidences of Elder Abuse have been increasing so make sure you have documented everything in case of misunderstanding by other (often well meaning) family members or friends.

As Power of Attorney for anyone, you are acting on their behalf and managing their money. It’s not yours so make sure everything you do is in their best interest.

It’s never to late to start this conversation but it is often easier if started earlier and gradually. Be patient and remember that someday, you will be there too, and will appreciate the help yourself.

Janet Gray, B.A., B. Admin., CFP®, CHS, EPC, CPCA is an advice only, fee for service Certified Financial Planner (CFP®) with Money Coaches Canada. She frequently appears in media and can be reached at janet@moneycoachescanada.ca. Janet was the founding Chair of the Ottawa Chapter of CARP from 2009 to 201

Government of Canada, Action for Seniors report, published Fall 2014.
The Alzheimer Society, June 2018.