Across all age groups, spanning from youth to older adulthood, financial concerns are ubiquitous. In the later stages of life, individuals aspire for tranquility rather than fretting over earnings. Unfortunately, many seniors grapple with financial mismanagement, lacking the requisite wisdom. Whether it’s navigating medical expenses, long-term care, or monthly bills, the complexities are manifold, and not everyone possesses the financial acumen for effective management. By cultivating fiscal prudence from middle age onward, one can escape the spectre of financial woes during their golden years. In this article, we share insights not only on managing finances in old age but also on various facets of life. The aim is to provide guidance to older adults and their families before crises unfold, recognising the pivotal role that financial wellness plays in overall well-being.
The source of inspiration for this article is the remarkable Mridula Srinivasan, an 84-year-old whose life and financial acumen captivated me. Affectionately known as ‘Mridula Aunty,’ she is a retired teacher from a private school, navigating her golden years without a pension safety net. Her late husband, was a high-ranking executive in the mining industry, and she lived extensively all over India but finally settled back in Karnataka. Tragically, Mr. Srinivasan met with a fatal accident during an early morning golf session a few years ago, leaving Mridula Aunty to reside alone in their spacious home in old Bangalore. Recently, she made the decision to join our assisted care facility, often stigmatised as an ‘old-age’ home in our society. However, she firmly believes that this transition is not just acceptable in the society but necessary for her. Here, I present her compelling arguments in favour of this shift, encouraging all of us to reflect on its merits.
Dealing with arthritis, a recent health challenge, she underwent a total knee replacement, leading to mobility issues. Our conversations cover a myriad of topics, and as an art historian, she vividly recounts stories of her favourite places and cultures. Proficient in discussing Chola sculpture and the Vijayanagar empire, she’s also a passionate collector of Tanjore paintings. During one of our discussions, the topic shifted to finance, eliciting laughter from her. Puzzled, she questions why elders find it challenging to relinquish control of managing assets as they age. In her musings, she reflects on stories she’s heard about seniors who faced dire financial situations due to a lack of financial wisdom.
First argument, when elders have one or other disability, they must accept the fact they no longer able to manage the assets or finance anymore. According to her perspective, there comes a time when the attachment to owning and managing assets must be relinquished. In her personal experience, upon recognising the decline in physical agility post-80, she opted to cease managing her substantial house—a residence that encapsulated 25 years of retirement memories. Despite the sentimental value attached to each room and artefact, including Tanjore paintings, she decisively sold the house. This dwelling had been her retreat during retirement, yet without hesitation, she embraced a more manageable alternative free from managing and maintenance responsibilities. While such a choice is common in the Western world, it remains unconventional in India where parents often preserve assets for their descendants. Because we worry about children Grandchildren. Despite acknowledging the difficulty of this decision, she attests that it was the best one she made. The proceeds from the sale fortified her otherwise depleted resources, bringing her tranquility and the ability to sign checks without reservation.
The second point she emphasises is the importance of maintaining straightforward finances. While Mridula Aunty possesses investment acumen, she acknowledges a lack of tech-savvy skills, particularly in navigating Internet banking. Cautious due to stories of scams and fraud, she found the digital realm overwhelming and decided to discontinue online banking. Preferring a tangible approach, she enjoys examining bank statements and consulting trusted bank managers for decision-making. With a single bank account, her money and investments are consolidated in a clear statement. To ensure seamless monthly payments to the assisted living facility, she set up standing instructions, concerned about potential signature discrepancies. While she withdraws necessary funds from ATMs, her reduced needs, aside from monthly beauty parlour visits, have simplified her financial routine. Drawing from her corpus at her age doesn’t perturb her, and she adheres to a monthly ritual of visiting the bank. Additionally, she has proactively drafted and registered her will.
Despite grappling with arthritic pain, she admirably refuses to fixate on her health issues. Undoubtedly a resilient personality, she proves challenging to debate with. During an eye consultation, when the ophthalmologist recommended surgery, she staunchly declined, stating, “I’m old, and all my organs are 84 years old. How many organs can you replace?” This left the doctor perplexed. She offers a prudent suggestion for everyone: prioritise the care of limbs. In her view, vital organs like the heart and brain are inherently designed to endure without frequent interventions. Her primary concern lies with the legs, and she raises a pertinent question: what’s the use if the heart beats well, but the legs can’t carry us around?
No naysayer, she knows there can be a day when she can be seriously ill and she has set aside a fixed amount for care if she were to fall ill and for hospitalisation. She is no more interested in any invasive procedure and is adamant that she should not be put on life support needlessly. She says everyone has a time for action and a time for rest and it’s resting time for her. She understands that she is in the wind-down mode, having lived a full life on her own terms, her past time now is rerunning old novels sitting on the balcony and watching birds, trees and enjoying the breeze. She believes in living in the present and not expecting anything from anyone because she thinks gratitude, duty or care stems from an attitude of entitlement.
On the other side of Mridula Aunty’s story lies her less-than-ideal relationship with her sons settled in the US, a situation she attributes to the typical ‘mother-in-law daughter-in-law tussle.’ Recalling her mother’s advice about navigating in-law relationships, she emphasizes the importance of looking ahead and doing for one’s in-laws and children without expecting reciprocation. She believes in avoiding the emotional entanglements of gratitude and guilt. While acknowledging that, ideally, children should not give up on their parents, she bemoans a sense of ‘abandonment.’ Mridula Aunty deliberately avoids asserting entitlement over her children, a choice that pays off in her later years. By not burdening her children with guilt, she ensures a relationship devoid of excessive doting and emotional baggage.
You may be wondering why such an extensive narrative. The reason it serves the purpose of illustrating the significance of ‘money management’ and its role in bringing peace in the later stages of life. As we navigate the challenges of aging, we rely on money, relationships, and support systems. Conversations with Mridula Aunty and other seniors reveal a key insight: the happiest individuals are those who have relinquished once-clung-to worldly possessions. In contrast, those who anticipated the world to cater to their needs tend to harbour cynicism and grumpiness.
First thing we learn from Mridula Aunty is the willingness to switch over to a new innings. Don’t be afraid to switch. It is easy to keep things as they are in life and that’s what most elders do. People fall into routines and get comfortable with present circumstances. Unless you change and adapt to the new circumstances, you develop complacency which will deprive the individual of a potentially better future. Mridula Aunty, anticipating the vagaries of the next phase, was willing to forgo her ‘comfort’ zone and her lifetime attachment to her paintings and sculptures.
Being well organised about your money is a good idea at all times, especially important in old age, when there’s an increased risk of illnesses that might make managing your money difficult or impossible. This need not mean anything very elaborate, like Mridula aunty decided to keep it simple. At her age, she knows better to stay away from more adventurous and risky investments rather she wants just fixed deposits. And everything in paper.
With many uncertainties that life throws at a person during the latter stages of life, it’s certainly a good idea to keep things simple, especially in this high-tech age that can be daunting to those unfamiliar with technology . That’s why Mridula aunty decided to go with the age old banking system. One can achieve this by cutting down on expenses, reducing the number of bank accounts, and consolidating on investments a person has. In old age, it can be harder to juggle between various accounts and keep on top of all of these different areas, so having just one savings account, for example, and limiting the number of investments one has, can help make things a little more manageable. The example set by Mridula aunty is what we also suggest.
Keeping all your financial documents in one place is a simple but
effective first step.
Another is to keep a clear list of all your finances:
• Your spending
• Sources of income
• Debts
• Savings, investments or property.
This kind of information will make things much easier for anyone you later ask to help
manage your affairs. When getting older, cognitive decline can play a factor, so
speaking to family members before such occurrences, putting steps in place so that they
can help with money when you are unable, will be an important step to take.
Be very cautious while handing over the control of your finances to ‘another person’. It makes sense to have plans in place in case you become too ill to manage your money. A friend, relative or professional adviser can be a great help. A professional can be hired to act on behalf and you can spell out your needs. In this sort of arrangement, there is no entitlement as in the case of children. Children, sometimes think that it as their ‘money’. In a professional’s case, he will charge his professional fee which you have agreed upon and no entitlement. But if you become unable to take decisions about your finances, you can set up a legal arrangement to let them do so on your behalf. This arrangement is a power of attorney.
Managing a limited income amid numerous medical expenses underscores the need for prudent financial behaviour. It’s crucial to exercise caution and refrain from depleting savings. People, including children, relatives, and friends, might seek financial assistance, recognising your financial standing as a potential trap. While generosity is commendable, it’s imperative to ensure your money lasts until the end. Elders often encounter requests from family members who perceive it as their entitlement. Though it might seem stern, it’s wiser to decline and potentially avoid souring relationships. Being judicious with available funds prevents financial disaster in later years, as emptying coffers is an unwise choice.
When elders express reluctance to ask for financial assistance from their children, it raises questions about this perceived hesitation. This is a crucial time for children to reciprocate, understanding that their parents have invested significantly in their well-being. For those children who are sensitive to their parents’ financial situation, it becomes an obligation to provide necessary funds. Unfortunately, some children evade this responsibility by claiming that their parents never ask for money and only require basic necessities. A recently discharged patient from our care facility shared, “I wanted to tip all the caregivers who helped me recover, but I don’t have any money, and I’m hesitant to ask my son. As a responsible parent, I ensured my three children had everything growing up, and today, all three are well-placed.” The experience of financial hardship in old age is undeniably distressing.
We’ve previously addressed the issue of ‘inheritance impatience.’ As the longevity of Indians increases, the postponement of wealth transfer from older individuals to their kin is giving rise to cases of impatience among potential heirs. Children desire swift inheritance to enjoy assets promptly, and they are increasingly unwilling to endure delays. This impatience is a significant factor contributing to elder abuse, with properties and assets becoming contentious issues among siblings, leading to family dysfunction. Our perspective is to preemptively address this matter. If you have substantial wealth, consider distributing a portion among your heirs now, ensuring a smoother process and averting potential conflicts. It’s advisable to retain a reasonable sum for your future expenses. The same applies to fixed assets – it might be beneficial to hand them over or divide them among your children before managing them becomes challenging or unwieldy.
Recently, we received a call from Thomas, a 78-year-old coffee estate owner in Wayanad district of Kerala State. He sought our assistance in mediating a situation with his sons who are settled in the UK. Regrettably, Thomas now realises the wisdom in his wife’s advice to sell the estate, as both sons have no interest in managing it and show no inclination to return. Over the past two years, the once lush 130-hectare coffee plantation has deteriorated significantly. Hindered by his diminishing faculties, planter Thomas can no longer oversee the estate. His mistake lies in not liquidating the property in a timely manner. Given his dilemma, prospective buyers are offering prices well below the market value. Thomas’s situation, involving children disinterested in inherited property, is not unique; it reflects a broader trend. The majority of the current generation is uninterested in owning agricultural land or rural properties, opting to pursue careers elsewhere. Expecting them to remain tied to such assets is impractical. Making timely decisions, especially regarding assets, is crucial for effective ‘money management.’
Creating a will and establishing a power of attorney are essential steps for elders. Ensure all bank instruments have nominees or are held jointly. For regular payments, consider setting up standing instructions with the bank to avoid writing cheques. When dealing with substantial sums of money, it’s advisable to engage a trusted, authorised financial advisor or a social gerontology practitioner. They can assist in preparing a will, making wise investments, and more. However, verify their accreditations thoroughly before seeking their assistance. Social gerontologists can also be valuable in navigating the complexities of long-term care and financial management.
Lastly, stay vigilant against fraud. There are individuals seeking to exploit older people, and the unsuspecting may easily become victims. Even when it involves your own children, skepticism is crucial. Consult with family and friends before committing to any savings or investment plans. For those unfamiliar with financial matters, following the given advice and engaging the services of a trusted financial planner can offer security and peace of mind. Exercise caution and avoid making impulsive commitments without consulting a reliable person or professional and others must be kept in the loop.