Whoever said wisdom comes with age probably hasn’t had to remember all of their online passwords. While you’ve accumulated a lifetime of knowledge and experience, managing money in your 80s is a new skill to learn, and it can be easy to make financial mistakes. 

This blog will discuss the common money mistakes octogenarians make — and how to avoid them with grace. You’ll learn about: 

• How conservative to be in investing 
• The money-related conversations to have with your loved ones 
• How to avoid falling for financial scams and fraud
• How to plan for long-term care 
• The importance of appointing a Power of attorney 

You’ll also hear from Vancity and Aviso Wealth advisor Sonny Nieslen. He kindly sat down with us to discuss money mistakes to avoid in your 80s, giving you a professional insight into the subject.

Being too conservative in your investments.

Many folks in their 80s have guaranteed term deposits and live off the interest of their investments. But you need to remember to factor in taxes and inflation—these factors make it, so your returns do not stretch as far as they once did. Being too conservative in your investments can end up costing you money over time, as inflation makes goods more expensive, and necessary taxes drain your bottom line. 

This doesn’t mean you should change your entire investment portfolio, but rather, be aware of what conservative investments are potentially costing you. Wealth advisor Sonny Nielsen doesn’t advocate for taking on a bunch of risky portfolio investments or buying volatile stocks like cryptocurrencies, but he does say, “It’s important to understand how your choices, especially when they’re fairly conservative, fit into your overall financial plan.” 

It’s always important to speak to your advisor about the best strategy for you and your lifestyle when it comes to investing. 

Avoiding hard conversations with loved ones about your money.

If you’re updating your will, considering selling your house, or just thinking about your finances in general, it’s a good idea to loop in someone you trust about your wishes and wants. And it’s especially important to loop in the people who are affected by your financial decisions.

The last thing anyone wants to do is to make things more difficult for their loved ones. If one of your children or other loved ones is a part of your long-term or end-of-life plans, either financially or otherwise, you need to involve them in the conversation. It can be a difficult topic to bridge, but it’s important to make the effort. 

Not appointing the power of attorney to someone you trust.

It’s important to appoint someone you trust with the power of attorney. Hoping for the best but being prepared for the worst is always a good plan as you age. If you become mentally or physically incapable of making financial decisions you want someone who knows what you want to be able to take care of your finances for you.

The power of attorney does not give anyone the power to change decisions made about your finances.

Putting off estate planning and conversations about your will and your financial wishes.

If you haven’t considered your estate planning, spoken to your beneficiaries about what’s in your will, or gotten advice from a financial advisor on your end-of-life financial wishes, including the transfer of your wealth, now is the time to do so. These are conversations that you don’t want to put off. Ultimately, planning for your end of life is a gift to your loved ones. 

Sonny tells his clients, “It’s your money. You get to do whatever you want to do with it.” And in some inheritance cases, that might be a case of “living giving.” 

Sonny says that giving while you’re still here can allow you to enjoy the benefit of that gift. You get to see the impact of whatever it might be, like, for example, putting your grandchildren through university. 

Not being aware of the signs of financial scams, fraud, and abuse.

Seniors are, unfortunately, often targeted by financial scams. This is because older people are typically home during the day, may be vulnerable, and often have savings or assets in the form of investments, property, and pensions. 

Stay vigilant, especially of unsolicited financial offers, anyone asking for a refund for money they “accidentally” deposited in your account, and anyone asking for your personal information. If someone representing your financial institution calls you, get their name and verify the caller by calling your financial institution’s official phone number — not a phone number they give you. 

If you’re unsure, reach out to someone you trust or a community institution, like your doctor, a senior’s community centre, or your financial institution. If you’re older, Sonny recommends giving your wealth advisor a trusted contact person, someone they can call to bounce things off of in case of unusual financial activity.

If you are caring for an elderly loved one, some signs of financial abuse may be: 

• Unusual bank withdrawals or investment liquidations.
• Sudden changes in living arrangements.
• Inability to pay bills.
• Stopping purchases of essentials like clothes, groceries, or medications.
• Missing valuable possessions.
• Taking on financial responsibility for a family member.
• Unexplained fear or changed feelings about certain people.
• Discrepancy between lifestyle and financial assets.

To his financial peers, Sonny says, “Any time a fraudster is taking advantage of somebody who’s a senior, they typically need to involve somebody else, like the credit union, their advisor, or somebody that does the transaction—and that person needs to ask questions.” 

Lending money or investing with grown children to your own financial detriment.

Lending money or investing with grown children can be a delicate situation. While it’s natural to want to support your children financially, you also need to ensure you have enough money to live comfortably in your retirement. 

Lending out or investing what could be earmarked for long-term care comes with risks. Before you lend money or invest, speak to a financial adviser to ensure it’s within your budget. 

Finding a balance is easier with help.

When you’re in your 80s, a trusted adviser is crucial to keeping your finances on track and doing what you need them to do. A financial adviser can help you find a balance between being able to plan for inflation costs, not giving away too much of your money, and also spending it and enjoying your lifestyle. 

Vancity wealth advisors like Sonny Nielsen help Vancity members in their 80s stay financially healthy, ensuring they can afford the lifestyle they want throughout their entire lives. Connect with Vancity to explore solutions for your unique needs.

Disclaimer: Mutual funds and other securities are offered through Aviso Wealth, a division of Aviso Financial Inc.   The information contained in this article is from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete. This material is not intended to be investment, tax or other advice and should not be relied on without seeking the guidance of a professional to ensure your circumstances are properly considered. Please see our Terms of Use.