For many, the older years can seem like a kind of bookend to life, a time for getting all our plans in order. From a wealth planning perspective, however, organizing our financial and related affairs is best done earlier rather than later. Inevitably though, this can be difficult to execute given how overwhelming it may seem.
Starting with the basics can be the best approach: Do you have a Will and is it up to date? Are all your key documents (joint and individual bank and investment accounts, property-related forms, etc.) and passwords accessible? And in terms of your investments, is the mix appropriate for your life stage and current goals? Traditionally, older investors (65 years plus) have been advised to adopt a more conservative asset allocation – for example, to opt for the relative safety of bonds. The thinking is now less definitive with most investors, regardless of age, advised to have a well-balanced portfolio. Life expectancy continues to increase and in today’s low yielding environment, being too cautious could lead some retirees to outlive their money, notes Richardson Wealth Portfolio Manager Derek Benedet. “A well-balanced portfolio that suits your risk preferences can provide enough capital appreciation throughout retirement to ensure your savings continue to grow,” he adds. Consult with an Investment Advisor for a thorough assessment of your needs and the best risk-adjusted investment approach.
Downsizing or smart-sizing: Considerations and challenges
Beyond these fundamentals, many of us tend to ignore or postpone some other more challenging decisions. Among them are plans around when and how to downsize (smart-size!) from a precious, ‘forever’ family home, what the alternative living arrangement should be, and perhaps the most confronting decisions of all – planning out living, care and financial arrangements should we become physically frail and/or cognitively impaired. Once again, planning is best done early, on your own terms, when you’re in good physical and mental health, and fully able.
More commonly, many of us prefer to maintain the status quo, believing that’s the best way to hold onto independence. But this assumes nothing will change in the near future – our health will remain intact and we’ll manage just as we always have. Realistically, though, we’re all likely to face downsizing in our later years. Triggers can include any of the following:
- Ongoing challenges and difficulty maintaining a larger family home;
- The need to cut housing costs and free up income for retirement; and/or
- Health issues and the need to transition to accommodation that includes care.
Offloading a lifetime of belongings is easier said than done. But consider the alternative – a crisis situation in which you’re forced to make a hasty move. Being proactive and starting early is never a waste of time or energy. If you undertake the process yourself, start with a checklist and consider four key areas:
 | Giveaways: Things to give away to family and friends. Richardson Wealth Vice-President, Tax & Estate Planning Maureen Glenn suggests giving with “warm hands” – that is, when you can enjoy gifting certain possessions to loved ones and the pleasure it brings both of you. |
| Donations: Anything you/others don’t want but may benefit charity organizations seeking donations. |
| Sale items: Do you have the time and inclination to sell anything of value or can you enlist the help of children or grandchildren? |
| Rubbish removal: For possessions that are broken, unwanted and no longer useful or desirable. |
Consider the financial, emotional and personal costs to downsizing and weigh your options carefully. Discuss these issues with family and a financial advisor and consider professional services that specialize in helping older individuals to downsize. The decision should factor in costs (both financial and emotional) versus benefits. Consider, for example, closing costs from selling your home, moving costs and the reality perhaps of moving out of your location and away from your comfort zone. Would a move take you away from family, friends and essential features of your daily network like medical professionals and neighborhood stores and facilities? Of course, these issues can all be considered when selecting a new location and may be moot if you opt to live closer to children or other family like siblings. The purpose of downsizing is ultimately to help create a simple, safe and stress-free environment.
Retirement living: Vast options and complex emotions
Today, there are diverse options for retirement homes including independent living, assisted living and memory care.
It’s common though for many of us to be resistant to this option. In a conversation with Sarah Widmeyer, Richardson Wealth’s Director, Wealth Strategies, Matt Del Vecchio, a Certified Professional Consultant on Aging, says this reluctance is largely due to fear, anxiety, a lack of knowledge and an unwillingness to admit to increased care requirements.
Mr. Del Vecchio, whose name coincidentally means ‘of the old’ in Italian, is also the founder and president of Lianas, a Canadian company specializing in senior transition support. He recommends taking a tour of senior residences to address these fears and stigmas. Today, the sector covers a broad spectrum of services and approaches and caters to many different types of clients. There are no obligations or commitments when touring residences, which will give you a sense of the culture and atmosphere, and help you understand the levels of care. More practically, it allows you to view apartment options and to get an idea of costs and tax credits. Lianas advises individuals and their families to take advantage of the complimentary lunches offered by many residences as a good way to try the food and mingle with other residents. You’ll get a true idea of the residence in an unscripted manner, according to Lianas.
Professional opinions
Still unconvinced or needing an objective view beyond your children and family? Lianas suggests talking to a trusted professional or advisor like your physician or specialist. Doctors will recognize potential vulnerabilities and will usually suggest alternative living arrangements if they feel you may be at risk. And if you’re worried about running out of money, talk to your financial advisor to prepare a financial plan, plotting out different scenarios to ensure the move to a residence is viable over the long-term. Social workers, geriatricians and senior specialists can also offer insight and an objective take, according to Lianas.