The pandemic has changed the way many seniors look after their finances, even if they have been somewhat insulated from the financial effects of job loss and layoffs.
“Most seniors are on a fixed income ... so nothing there has really changed. What has changed is perhaps the day-to-day access – walking into an institution or requesting funds or just talking to somebody, it's a little bit harder,” said Laszlo Szojka a financial advisor with DW Good Investment.
Szojka said he has seen a number of issues come up for seniors. Some of them are more basic, like switching to online banking, and some of them are a lot more serious.
The switch to online banking can open seniors up to issues of fraud and elder abuse. Szojka said he has seen people taking advantage of seniors while they are trying to get things organized.
“I had one senior that somebody somehow had access to their accounts and actually was charging stuff to their bank account,” he said.
Sometimes children who have lost their jobs and have permission on the accounts are able to access the accounts without their parents knowing.
“(The parents are) trusting and letting them do their thing. It turns up (the children have) taken $10,000 to $20,000 out of their accounts and are paying bills on their own. I have seen that, and that's the sad part of this pandemic,” said Szojka.
What to do?
Szojka does have advice for seniors who find themselves in this kind of situation. They need to find someone they trust – which can be difficult if family is involved.
“You have to re-establish yourself at a different institution and lock out all access, but you have to be pretty financially literate to do these kinds of things,” he said.
There isn’t much Szojka can do when he comes across these situations, as it is the senior who has to initiate the call to the authorities.
“In some cases, you may be reporting your own family member as abusing, and that's unfortunate because they don't want to do that. It’s a terrible circle to be in,” he said.
Fraud is also an issue that comes up for seniors. The Canadian government website (https://www.canada.ca/en/financial-consumer-agency/services/covid-19-managing-financial-health.html) about managing finances in challenging times states fraudsters prey on consumers fears and misinformation over the pandemic.
It is important to be cautious when receiving emails, texts, and phone calls, the website states. Never click on links or attachments from suspicious or unsolicited emails or texts, financial institutions will never ask for personal information through email or texts, and when banking online always type the institution's website address in the browser yourself.
“There's dangers about using your credit cards, and sometimes (seniors) get called out of the blue by random solicitors who are actually crooks. They fall prey to these scams a lot easier than the rest of us,” said Szojka.
The upshot
Szojka added there has also been an interesting side to the pandemic for seniors who have a stable income environment. Many seniors are finding they are spending less.
“Typically, they would go out more and they would have coffee, or they would have lunch. They're not doing any of that – they're not travelling. They're not driving anywhere, so everyone's kind of stuck at home. Their actual day-to-day expenses are down,” he said.
Szojka said he has clients who are reducing withdrawals from their investments and filing them back into their TFSA.
He recommends seniors invest in what their goals are for the money – if it is for their own use, he suggests investing more conservatively.
“If they're investing money that is eventually going to end up in their hands or grandkids' hands, then I usually tell them to invest as if it was in their hands now,” he said.
He also suggests seniors who have excess capital should give some of the money to their children now.
“It's more rewarding to give them money now, to let them either buy something or pay down debt or whatever else. You get an emotional reward out of that,” he said.
During crisis time like this, it is also important to have an up-to-date will, personal directors and enduring power of attorney, said Szojka, as anything can happen, and you want to have other people who are able to help you out.
“Have people you trust to help you in times like this, those are the key things. And if there is something going on, reach out as quickly as you can to people that can help you. That's kind of the basics of, right now, what's going on.”
