Seniors Face Many Financial Challenges
June 1, 2022
Financial challenges facing seniors include inflation, increasing medical costs and longevity, writes Peter Watson.
Interest rates have been extremely low for years and that has hurt investment returns from Income bearing investments like Guaranteed Investment Certificates. Many seniors rely on this type of investment.
The result of this extended period of low investment returns means their money has not grown very quickly.
Inflation. It has suddenly come roaring back. Making ends meet is becoming more difficult.
Medical costs. Many healthcare related costs including the reality of growing old and needing extended medical services are not covered.
Longevity. The positive reality of better health care and healthy living is people are living longer.
From a financial perspective, a longer life means more years to pay for living expenses.
Depending on the accommodation chosen, the cost can range from expensive to very expensive. Also, as they continue to live in an assisted living facility, they are more likely to require additional care services at an additional cost.
Escalating house prices. For some that have owned a house for many years there is potential they will receive a significant amount of money when they eventually sell. That is fortunate for them, however many do not own their own house.
As house prices have become exorbitant, many parents provided financial assistance to their children that was necessary for them to purchase their own place to live. Some seniors, through the generosity to their children, might find they are short of funds to finance their own living costs.
Going old does present some financial challenges. We recommend you consider these and plan accordingly.
Peter Watson is registered with Aligned Capital Partners Inc. (ACPI) to provide investment advice. Investment products are provided by ACPI. ACPI is a member of the Investment Industry Regulatory Organization of Canada. The opinions expressed are those of the author and not necessarily those of ACPI. Watson provides wealth management services through Watson Investments. He can be reached at www.watsoninvestments.com