About 15 years ago, Sheila Munch was a bank branch manager and saw something that didn’t add up.

A widowed, elderly client was regularly withdrawing $1,000 via money order. When she started withdrawing that amount more often, Munch asked the woman if everything was okay. The client said it was.

But Munch pressed, and asked to visit the client’s home. There, she says, “I saw all this junk that she claimed she was ‘winning.’ The guy would tell her she just had to pay for shipping. And then he became her friend, calling her all the time [saying], ‘Wow, I can’t believe you won again.’ ”

She explained to the client that her phone friend was in fact a fraudster taking advantage of a lonely senior. She urged the client to call PhoneBusters, the National Anti-Fraud Call Centre. The client did, and the calls stopped.

Read: Protect elderly clients from scams

Since then, Munch, now a senior financial planning advisor at Assante Financial in Oshawa, Ont., hasn’t had to deal with client abuse.

But with the population aging, advisors need to listen for cues. Many of these aging Canadians are divorced or widowed, and don’t have dependants—or, if they do, those dependants live far away.

So, start asking single clients more questions, says Darren Farwell, senior wealth advisor, ScotiaMcLeod in Toronto. For instance, he has an older client in Toronto who told him Alzheimer’s runs in her family. “My first question was, ‘If something were to happen, and you can’t look after yourself, where are you going to go?’ She said, ‘I’m going to live with my daughter in Calgary.’ ”

Farwell questioned whether she’d asked her daughter if that would be fine with her. She hadn’t. So he’s told her to call and explain her wishes.

If the daughter isn’t agreeable, he and the client will explore other options, such as a nursing home. He’ll ask which one she’d prefer to live in, “and if we learn it costs $4,000 a month, we’d build that into the plan.”

Read: Dealing with POA abuse

Munch, meanwhile, asked a 70-year-old widow who didn’t have children what her plans were. She told Munch she was going to name a friend as her executor, rather than a third-party trustee. Yet, when Munch asked how old that friend was, Munch learned the client was the same age as the friend. That triggered a delicate conversation about what would happen if the friend died first; the client would have to rethink whom she’d want as executor and PoA, and redo her will. Or, she could include a contingent executor and PoA now to save hassle later. “You raise questions and they come to conclusions on their own,” says Munch. “After discussing all the ‘what ifs’, she ended up asking the friend to be primary executor and PoA, and the friend’s daughter to be secondary. I don’t think she would’ve done that had we not had the conversation.”

Retirement income

The per-capita cost of living is higher for singles than it is for couples. “It’s not half as expensive, just because you’re single,” says Munch. “Lighting, hydro and phone costs are the same.”

Malcolm Hamilton, pensions expert and senior fellow at the C.D. Howe Institute in Toronto, agrees. “A single person will have expenses that are about 50% higher than half of a couple. So if a couple needs $30,000, a single, to have a similar standard of living, would need about $22,500.”

This means a single-person household needs more for retirement. And, unless a client has existing health problems, she or he should plan to live until at least age 90.

For that planning, Hamilton recommends using the 4% rule, and then adjusting up or down based on inflation. So, if a single person is aiming to be retired for 25 years, she could withdraw about 4% of her capital in year one, and then more or less in subsequent years.

“If she has a half million saved in an RRSP, she could take out $20,000 that year. And she might get another $20,000 from government benefits, so that’d be an after-tax total annual income of about $35,000. She has to manage her expenditures accordingly.”

Read: Learn the signs of elder abuse

One way to get more income is by using life-only annuities (see “Annuity triggers,” below). Single clients are “excellent candidates for annuities because they may not need to leave behind an estate,” says Bruce Cumming, executive director, Private Client Group, HollisWealth in Oakville, Ont.

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