The Lawyers Weekly - Grey Matters

SOME KEY QUESTIONS

According to the Ontario
Seniors’ Secretariat, a good
financial plan will help individuals
understand what choices they
have, reduce uncertainty about
the future, and help them make
sound decisions. Specifically, the
government department says, a
financial plan should answer
these types of questions:

How much income do I need?

Do I have
enough money to
retire?

Should I keep working?

EDWARD J BOCK 111 / DREAMSTIME.COM

Tailoring a financial plan

DONALEE MOULTON

When people retire, the need for a financial plan doesn’t diminish, but according to the experts, the amount of money within the plan usually does. Advisors play a key role in protecting seniors’ finances — and the seniors themselves.

“There is a fundamental mind shift when someone stops working. We find even seniors with one, two or three million dollars are worried about running out of money,” said Catherine Watson, a partner with McInnes Cooper in Halifax.

Two financial factors are at
play, said Jeff Turk, client port-
folio manager with Cumberland
Private Wealth Management Inc.
in Toronto. “For most seniors, the
main investment consideration is
income for their current needs
and having enough assets to out-
last their future needs. People
don’t realize you’re not trying to
get the growth up. You’re trying
to mitigate losses. That means
you have to monitor the portfolio
on a regular basis.”
Seniors and their advisors also
need to focus on where money is
being spent. “The key is to look at
expenses. Nowadays, there are
ways to save money that won’t
affect your lifestyle,” said Marcy
Ages, a senior consultant with T.E.
Wealth, a national wealth man-
agement firm, in Toronto.

She pointed to money-savers
such as discount companies Deal-
find, Groupon and TeamBuy,
which offer local products and ser-
vices at significantly reduced rates.
“You can still get a manicure but at
half price,” said Ages, a certified
professional consultant on aging.

Managing expectations is
essential. Of course, not all sen-
iors have the same outlook on
saving and spending. Attitude
and actual cash outlay often
depend on age, said Ages. “Sen-
iors who went through the
Depression, they know what to
do. They know not to waste.
Other people who never had to
worry about money may have a
completely different approach.”
The latter may have to learn
self-denial. “For many people, a
financially successful retirement
is about saving money instead of
spending it, and investing wisely,”
said Kay Gray, a partner, tax ser-
vices, with Grant Thornton LLP
in Vancouver. “Most seniors
should not buy a U.S. vacation
property, a new car, or take a
vacation abroad.”
Financial concerns for seniors
are also intimately linked to con-
cerns about health care. Aging can
bring with it new and increasing
medical problems, many of which
come with a hefty price tag. Nurs-
ing homes and round-the-clock
care, for example, can run into the
tens of thousands of dollars a year.

A lot of seniors worry about how these costs will be met. Others — often erroneously — think they can breathe easy because they have a home as an asset. “Many think their house will pay for this if nursing care is required. But if you want to stay in your home, you need to ask where the money will come from for care,” Ages said.

For seniors, the issue of money
is also tied into susceptibility.

“Many seniors become increasingly reliant on their children or caregivers. That can result in increased vulnerability in terms of financial abuse and power of attorney abuse. We all have lots of files where that is a concern,” said Watson, who is leader of McInnes Coopers’ regional Estates and Trusts Service Group.

The onus is on the advisor —
lawyer or accountant—to know
his or her client, she added. “You
need to be more sensitive about
the circumstances of a person’s
life. You shouldn’t embark on
any planning until you under-
stand this.”
Understanding takes two
forms: their finances and their
personal situation. When it comes
to discussing money, there should
be no holding back. “The key to
talking to anybody is you have to
be up front and honest about the
markets and how their plan is
going to work,” Turk said.

“There can be a lot of mis-
conceptions about investing.
People need to understand this
is long term. With seniors who
haven’t been investing or plan-
ning to this point, you really
have to temper their expecta-
tions. You have to tell them
what they need to hear.”
Those are not easy conversa-
tions. “Many seniors don’t want
to talk about money. It’s one of
the taboos,” said Gray, who is
leader of Grant Thornton’s suc-
cession and estate planning team
for the Greater Vancouver Area.
“Wealthy seniors can be an excep-