What is senior financial health? We always talk to physical, emotional and mental health but what about financial? The number of seniors in North America is increasing yearly. Do these seniors feel well financially?
Surprisingly, seniors, which include those 50 and over for these statistics:
- control 70% of all wealth
- own more homes than any other age group
- account for 50% of all discretionary spending
- purchase 41% of all new cars,
- spend more on groceries, health products, travel and leisure than any other age group.
This would suggest we don’t need to worry about seniors? Wrong! While some of these stats include a younger age then most would deem senior, they are telling.
What isn’t included in the above demographics? Some of these seniors may struggle with many financial things. For example, rising housing and health care bills, inadequate nutrition, lack of access to transportation, diminished savings, even job loss.
How does lack of financial health or security affect senior’s emotional and physical health?
Older women typically receive much less annually than older men due to lower lifetime earnings. These lower lifetime earnings may come from time taken off for caregiving, lower wages and other issues. Almost two thirds of households aged over 60 have some form of debt. Approximately one third of senior households owe money on a mortgage, home equity line of credit or both. Financial stress adds to the additional stresses of aging. It can hinder well-being, wellness and physical and mental strength.
What is being done to address the financial health needs facing seniors?
Until recently, the percentage of seniors with low incomes had been declining. It then reached a ceiling, the gap between the income of seniors’ and the rest of the country began to increase. It is even more pronounced for seniors living alone. Women who are divorced or separated have a much lower retirement income than single women or widows.
In Canada, many seniors who are eligible have not applied for the GIS – the Guaranteed Income Supplement. Because of this, they are not only deprived of this income but also of all the other benefits provided that use the GIS as the criteria for eligibility.
Many seniors are not aware of the various programs offered. If they do know of them, they are late in applying. Lack of awareness is one of the major reasons many seniors receive such a low amount in pensions.
For caregivers, one of the most useful things you can do is ensure that your loved one is receiving all of the benefits for which they are eligible. With the GIS, this means renewing it each year. For seniors with cognitive problems or low literary skills, this can mean losing out on many benefits if there is no one to help them with information or applications.
Is the government helping?
Today, in Canada, the federal budget promises to top up this monthly non-taxable benefit for low-income OAS recipients. Up to $947 annually, improving the financial security of about 900,000 seniors across Canada. It doubles the current maximum GIS top-up. It represents a 10% increase in the total GIS benefits available to the lowest-income single seniors. A few other key facts about the supplement increase:
- It represents an investment of over $670 million per year
- The graduated benefits are based on income threshold of $4,600
- The benefits will be phased out at income of $8,400 or more
- Going forward, they will be calculated based on individual (not combined) incomes
Learn more at https://www.esdc.gc.ca/en/cpp/oas/gis/index.page
For those seniors who continue to work, there are clawbacks in the form of taxes. These have to be paid or other allowances may be cut completely. The best thing we can do for all seniors is to make sure they are aware of every type of income available.
So what does lack of financial health mean to seniors?
Lack of financial health or security adds to the stress that many seniors are already going through. They may have illnesses or disabilities that force them to live where they don’t feel secure or have privacy. The worry of not having enough money puts more pressure on them. It adds increased risk for those who have heart disease and other illnesses affected by stress.
Make sure your loved ones have help in accessing all of the help available to them upon retirement. Source a financial advisor to help them work towards financial wellness.