What steps can you take to prepare clients for vulnerable old age?

'Aging specialist' walks you through the process – and offers to help if it's too daunting

What steps can you take to prepare clients for vulnerable old age?

How are you emotionally and financially preparing your clients for their vulnerable old age?

The facts are in and they’re daunting, but it helps to know the terrain as you advise your clients:

  • People are living longer – and most haven’t financially planned for their vulnerable old age. 
  • More than 6 million Canadians are already over age 65 – with 2 million more coming in the next decade.
  • There aren’t enough personal care workers or nursing home spaces now to support those who need help.
  • While most Canadians have started to save for retirement, less than one-fifth of employed Canadians and less than one-third of retired Canadians are confident they’ll have enough retirement income.
  • And then there are the additional financial demands on families whose elders don’t have the resources to age out now, which is impacting how the next generation can also prepare for their turn.  

It’s daunting: yes. But Neela White, a certified executor advisor and portfolio manager with Raymond James Limited in Toronto who’s also an “aging specialist”, has advice for advisors as they more concertedly prepare their clients for this phase. She’s also speaking at the online Women in Wealth Conference on Dec. 7, sponsored by Edward Jones. You can register here.

“Preparing everything for this vulnerable aging is an overwhelming conversation to have, and there are a lot of moving parts that are better recognized at different ages as people grow into it,” she said. “I think it’s best received in digestible chunks.”

The first thing to do is ensure that your clients have a will and have assigned power of attorneys for both their care and finances, so their documents are in place. White said that’s critical since 50% of Canadians don’t have a will.

Then, you can begin to share some knowledge – such as you’ve gained in this five-part series, which has looked at the costs and concerns of vulnerable aging so advisors can help clients better prepare. You can read How are you financially preparing your clients for vulnerable old age?Can your clients afford to grow old?, What retirement savings gaps can you help clients close?, and How much will it cost your clients to help their loved ones age?

Next, as your clients consider downsizing, raise the questions of ‘“where do you see yourself living at the age of 75? 80? 85?, and who’s around you?’” said White. “If you think you’re going to live at home, what happens when the first health crisis comes? Is your adult child going to drop everything to take care of you? Are they prepared to do that? Can they afford to?

“If the answer is no, and you think you will end up in long-term care one day, where do you want to go? And how long is the wait list?” She noted one place she considered for her mom had an eight-year waitlist, but two to four years is often the norm, even with what happened in many residences during COVID.

If your clients end up living at home during their vulnerable stage, how will they pay for their additional care? That costs $20 to $35 an hour with most agencies having a three-hour minimum for each visit, and that only provides three hours of care – when your client may need more. If they don’t have the funding now, how will they get it?

“I think what you see people doing more and more is using their houses as their long-term care strategy,” she said. “They don’t have the money, so they say: ‘I’ll sell my house’. Or they don’t think of it at all because they think their spouse can take care of them, but then the spouse dies, and they may not be able to get into a nursing home for awhile, so they’re reliant on family, friends – who may also be dying because they’re at a similar age – and whatever community services can be provided.”

Gleaning answers to those questions can help you update their financial plans and address some of the issues. But, White noted the next piece is then to encourage clients to have the necessary conversations with their families.

“They need to have the conversation about who they expect to take care of them if something happens to them,” she said. “Then the family has to be honest enough to say whether they can. The adult children need to be candid with them – stating whether they can or cannot do it. If they can’t, they need to ask: ‘what do you want me to do?’

“I think they have to do that because there’s an awful lot of responsibility with being a caregiver. There’s a lot of caregiver stress. If you’re in a position now where your job is shaky, can you give up time? If the answer’s no and this is going to affect your lifestyle, I think you need to be honest with your parents.

“And, as far as parents go, I think they need to be less selfish and have the conversation. It’s not fair not to have it because it impacts everybody’s life,” she said, noting some caregivers bond with their parents more during caregiving, while others struggle with the strain of feeding and changing them, and dealing with all the logistics.

“Walk them through the wake-up call, the work, the finances, and then the emotions of what you’re going to be dealing with here, so you can actually say this is going to be a multi-pronged hit when it comes,” said White, adding that it’s a slow process of grappling with, and preparing for, the pieces someone will need in place as they age. “It’s not a sudden conversation. It has to be much more gradual with the pieces they can understand more easily.”

If advisors find these conversations hard to have – or don’t feel they have the expertise – they can also refer their clients to people such as White, who specializes in this area.

“People know when you’re authentic, or not, about something,” she said, adding she loves this work. “So, you really need to hone in on where your comfort is. If you’re not confident enough about it, refer it to somebody else because we ultimately need to concentrate on elevating our clients, and if that’s with someone else, that’s what we do.”

Neela White is a guest speaker at WP's Women in Wealth Conference on Dec. 7, sponsored by Edward Jones. You can register here.