It’s not just your health that’s at risk as you age…

As Australia’s ageing population continues to increase, there are growing concerns over how health issues will affect seniors and how

As Australia’s ageing population continues to increase, there are growing concerns over how health issues will affect seniors and how they manage their money and financial assets.

In particular, there are concerns that declining mental capacities, brought on my dementia and similar diseases, will impact on seniors’ financial stability.

As it stands, one in 10 people older than 65 suffer from dementia – three in 10 older than 85 – and this number is only going to get worse.

Kajanga Kulatunga, a portfolio specialist at the National Australia Bank, says the government and financial advisors need to do more to help older Australians understand how to organise and manage their finances.

“It’s a sad reality that we don’t want to think about but, as we age, our capacity to make basic financial decisions will start to slow,” he told The Australian.

He added that only 23 per cent of people aged between 50 and 70 use a financial advisor.

“And, based on internal research from our adviser network, that figure drops off sharply after the age of 65,” Mr Kulatunga says.

Mr Kulatunga says there is too much focus on how to build towards retirement and not enough on how to manage your portfolio afterwards.

One of the main concerns for many over 60s is the fact they feel as though they cannot trust big banks or financial advisors to right by them.

There have been reports of dementia sufferers being taken advantage of by financial institutions and even charities trying to trick older Australian into donating money.

Mr Kulatunga says scientific studies show many people struggle to comprehend basic calculations as they age, which makes it even more important for them to have a clear and concrete financial plan in place.

“Cognitive decline manifests itself­ here in many ways: forgetting PIN numbers and account passwords, not updating investment allocations over time, and sticking to sub-optimal tax or investm­ent strategies,” he says.

“People also don’t like to talk or think about having a problem,” he adds.

He says there are concerns many people will struggle to understand the changes set out in the new Age Pension eligibility test, which rolls out next year and suggests that even small steps like simplifying the language in financial documents for older Australians can go a long way towards helping them understand and manage their finances.

Do you have a post-retirement financial plan set in place? Did you notice your parents struggling to understand and manage their finances as they aged?

  1. If it was pension week my children (they are adults) would collect my money and bring it to me or use it towards ensuring my last wishes were met. (Or use it towards paying for the nursing home if I develope Alzheimers)

  2. You have to have a Enduring Power of Attorney, both my partner and i have had one for years,along with a will.

  3. Agree with Susan Mcguire you must think forward. We all need to think about pass words so computer account can be closed.

  4. What has worried me is the number of payment advices and other details that come electronically. I got an annual bill for an online service the other day for something I had forgotten all about. I checked my bank accounts and there are providers like Stan and Spotify that all communication is electronic and finding a contact to stop services or enquire about them is difficult. After several attempts contacting an overseas communication company I eventually was able to stop their service. Many bills only come electronically, bank advice too. If I am suddenly incapacitated how does my POA find all these details.

    • We have made hard copies with all those relevant details so our children will know what they have to deal with.

    • I’ll have to go through my stuff and make sure I have a list of automatic deductions and which accounts they come from.

  5. We are managing fine at the moment. My husband has kept up with technology to the point where he is building IT systems at his work. He is 67. I am keeping up with internet banking etc and I intend to keep up with all the innovations that come in the years ahead. I think it is very important not to be left behind and to remain confident using technology. If and when we become unable to cope we have EPAs with our children as Attorneys. Hopefully we have covered all the bases.

  6. That is why I prefer my bills to come snail mail! If they came electronically and I dropped dead tomorrow we would have all our services cut off as my husband won’t touch a computer and wouldn’t know where to start looking for the bills online to pay them when they come in.

    • I do the same. Three dimensional snail mail can’t disappear in a puff of internet smoke like electronic mail can and does. I pay everything on line, but I print a receipt every time and pin it to the snail mail bill.

  7. All the bills come by mail – except Bupa which is taken out of my credit card. Yes. It costs more to have bills posted but if I fall off the perch (inevitable really) Hubby or Children will have the paperwork arriving every month to remind them. Hubby knows that his signature is on every bank account so even though he doesn’t know what there is, if I’ve joined the choir invisible he can take bank statements to the bank and draw out the lot if he wants too. Our financial adviser will be her usual helpful self.

  8. Experts can go suck eggs as far as I am concerned. If I am unable to manage my finances I will appoint someone I know and trust to do so on my behalf. Though I would also suggest that if I am getting that helpless I will be taking steps to sort it out once and for all.

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