Delivering peace of mind: Understanding older clients’ fears

(March 2006) An elderly woman wanted to move to a new retirement residence, but was unsure if she could afford it. Her daughter spoke with her mother’s financial advisor to see if it was possible. When the daughter went back to see her mother, she told her that he said, "There’s at least enough to last a decade." Her 104-year-old mother looked at her daughter and said, "And then what?"

Health Canada estimates that the growth of the seniors’ population will account for close to half of the growth of the overall Canadian population in the next four decades. Living longer means many Canadians will need larger retirement savings to handle long term care needs.

How much is enough?

As geriatric care consultants we are often called upon to work with financial advisors to help address the "two great unknowns" — how long each client may live, and the financial consequences each client might face as a result of chronic or critical illness or a disability.

Many advisors may not be aware that one-third of their client’s life may occur after the age of 60. In addition a greater number of older people are choosing to "age in place" — that is remaining in their homes instead of moving to long-term care facilities. If so, is their financial portfolio sufficient to provide any and all services they may require?

Whatever your clients’ socio-economic status, cultural background, and social supports, they are looking to you for assurance they will have sufficient funds to meet their needs. In addition to causing distress to your clients, this fear often puts a strain on your time and on your relationship with your client. Advisors are often bombarded with telephone calls or visits focusing on anxiety about not having enough money to last "for longer than I expected to live."

With so many unknowns how do you design a financial plan that protects your client against future costs and manages your client’s money to last as long as he or she does? What are the appropriate options for your clients as they age, especially if health concerns become a factor?

Some financial advisors work with geriatric care managers who are familiar with the options and costs of local accommodations, health and personal care and other special services appropriate for the client’s lifestyle. The geriatric care manager helps clients focus on what is important to maintain their lifestyles, including travel, family and other leisure activities, while the advisor helps the client create realistic budgets. Often older clients are prepared to reduce their standard of living in exchange for a sense of financial security.

Changing needs and goals

In childhood and youth, one’s goals are focused on learning skills, gathering information and socialization. During adult and pre-retirement years a person’s goals centre on personal success, earning power, risk taking and a sense of adventure or new experiences. For older adults goals are typically to maintain:

a) independence, b) freedom from pain and illness and. c) a sense of financial security.

Keeping on top of your client’s changing needs will help you better formulate their financial life plan. It will help to alleviate the overwhelming concerns they may have about their long-range issues surrounding anticipated expenses over an uncertain life span.

You can deliver the peace of mind your older clients seek by identifying the common risks — namely chronic and critical illnesses, accidents and disabilities — specifying the financial effects of each, and explaining the elements of their financial plan that are designed to deal with these risks. Rather than growth of portfolio, planning discussions with these clients should emphasize the ability for them to be able to "financially cope" with any expense that arises in later years.

Jill O’Donnell, RN, BA is the founder of Complete Geriatric Care, a private eldercare consulting service and co-author of the bestselling book The Canadian Retirement Guide. Ronnie Rusk, BA, Cert. Gerontology is an associate at Complete Geriatric Care.

(03/13/06)