Planning is key for single seniors

Most solo-living seniors approach their financial affairs much the same as they handle other parts of life — they take care of what they can and seek help from family members and friends as needed. Take Vera Williams*, for example. She chuckles when she tells the story of having the eavestroughs of her house cleaned. Shortly after paying for the work, she awoke to the noise of water pouring from the gutters during a rainstorm; clearly, the cleaners hadn’t done their job. Much to the dismay of her daughter, the 82-year-old Williams took matters into her own hands. “I went out in the night, got the ladder and cleared the leaves myself,” she laughs.

Williams’ independent nature has stood her well when it comes to her finances. When her husband passed away 21 years ago, she started handling day-to-day money matters as well as her investments and estate plan. She’s been running her own affairs since and even acts as attorney for her elderly sister-in-law who suffers from Alzheimer’s disease. Williams says she relies on professionals she trusts and turns to her children for help, “when something comes up,” even though they don’t live close by.

“I’ve heard so many people say’Oh, I couldn’t do what you’ve done,'” says Williams. She readily admits she’s more fortunate than many of her friends in being both financially secure and mentally and physically competent.

Indeed, older adults who live alone are generally worse off financially than those who don’t: one of the saddest and most consistent findings to come out of Statistics Canada’s income studies over the years is that single seniors, many of whom rely significantly on public pensions, form one of the poorest groups in our country. Whether working or retired, as a single, you carry the load of living expenses alone; the full burden of your finances from budgeting to making good investment decisions also falls squarely on your shoulders. In cases of divorce or legal separation, financial troubles can be compounded by settlement, alimony and other payments. There’s also greater vulnerability to financial scams — con artists have a well-documented propensity to target the vulnerability of older solitary people.

For most of us, many aspects of our finances remain un-changed as we get older, whether or not we live alone — there are still regular bills to pay and tax returns to file. However, says Anne Chun, a chartered accountant and financial planner in Toronto, there are some unique considerations for people who live alone. A growing focus of her practice and of the financial industry in general is older Canadians and their families. Moreover, says Chun, increasing demand for such services led accountants’ groups in Canada and the U.S. to develop “PrimePlus” (previously named “ElderCare”), a customizable service package aimed at older people. Fee-based services range from completing tax returns to creating an estate plan, even paying monthly bills.

But despite this demographic spin, in reality, it’s not all that different from what good planners, accountants and other financial professionals have made available to their clients all along. “You can think of it as having a personal controller,” says Chun, who is co-author of a textbook on financial planning.

Speak up about your plans or, at least, write them down
Whether or not you enlist professional help and no matter how independent you consider yourself, it’s important to review your finances regularly since certain concerns do arise as we age. Above all, it’s important to plan. Chun cites a recent case of a client whose elderly mother was recently moved to a retirement home. “She sold her house, and she’s got some investments. Now, [her children] are worried about having enough money for her to be there as long as she needs to be.” Without a plan, they had no security of knowing her needs would be looked after. By conveying relevant information about your finances to the people who matter — your executor or the person(s) you’ve given power of attorney over your health and financial affairs, for example — helps ensure your wishes are carried out.

Communication — another key issue for all families — can be even more crucial if you live alone. For various reasons, many of us wait too long to plan financial matters; out of reluctance to confront difficult issues, some fail to discuss them at all. Chun says, in her experience, a professional can often help by broaching subjects some families have difficulty facing and serving as “quarterback” in the planning process.

*Name has been changed.