Losing keys. Forgetting passwords. Calling your grandchild four different names before landing on the right one. No one is immune to the normal annoyances of aging. Yet as Canada’s population continues to age, one of the less obvious perils is mismanaging personal finances due to memory lapses, confusion and other elements of cognitive decline.
Whether for yourself or for your parents, once one (or a loved one) reaches ‘a certain age’, it’s worth reviewing finances with an eye to simplify and protect. Here are 8 ‘anti-aging’ tips to protect your portfolio.
- Take inventory – As the saying goes, if you can’t track it, you can’t manage it. The older you get, the more important it becomes to create an inventory of financial assets and accounts. This should be kept in a safe place, such as a safety deposit box or with a lawyer, ensuring that loved ones will be able to access it when necessary.
- Pick one – You may be far from requiring someone to make financial and healthcare decisions for you, which makes now a great time to set up Power of Attorney instructions. Spouses typically have POAs prepared for one another, or you may choose an adult child, or other close family member or friend to assist with future decision making Even if you never require an official POA, you can gradually introduce this person to your financial portfolio, team of advisors, and tax and accounting matters, greatly simplifying estate administration upon your eventual demise.
- Pick two – More than one person may be granted Power of Attorney for the benefit of greater accountability. This will require extensive communication on shared decisions, so ensure that the two parties communicate well.
- Simple is best – At this point, you’re no longer in the building wealth stage, and, instead need your investments to be secure while they provide income. Work with a financial advisor to streamline your portfolio to fewer accounts and an appropriate asset allocation.
- Monitor credit – A credit monitoring service is an easy way to detect potentially strange activity. For those starting to help their parents with finances, this is a good place to start the sharing of information.
- Have a joint – Medicinal purposes aside, a joint chequing account is the easiest way for spouses, family members and business partners to ensure bills continue to get paid in the event you become unable to do so. All non-registered investment accounts can similarly be established as joint accounts.
- Automate it – Taking the time to set up automated bill payments and money transfers can go a long way to clearing head space and alleviating stress later in life. Regular and ongoing oversight of the payments and accounts can be managed with the help of a trusted loved one.
- Trust a trust – If you find yourself in the fortunate position of having more wealth than you will need for your future years, shifting excess assets and investments into a trust account will protect your money from falling into the wrong hands, including your own.