November is Financial Literacy Month and many financial institutions are capitalizing on this opportunity to launch new products and services. With the Holiday sales approaching particularly around Black Friday in the U.S. and Cyber Monday in Canada, RBC has just launched a new website, Why Financial Literacy Matters, that brings together a host of online resources for all life stages.
Financial literacy programs are not new and most other financial institutions, particularly industry associations such as the Canadian Bankers Association (CBA) and all other major banks in Canada already have some sort of educational programs in place for various segments of the population. The financial literacy programs usually cover new Canadians, students and millennials. But RBC’s Why Financial Literacy Matters website has a segment that targets seniors. The initiative itself is hardly novel, particularly on retirement plans and goals, getting the most from retirement income and other information which are all aimed at selling more services and products for the bank. But three subjects in this financial literacy segment for seniors interest me: ways for seniors to protect themselves against fraud; the financial cost of care; and power of attorney 101.
One would have thought that the mature population of Canada – baby boomers and seniors – should be quite financially literate at their ages. After all, these are the people who will need adequate funds in their retirement years and most of the seniors are already in retirement drawing money from their nest eggs. But according to a recent study from credit firm Equifax, Canadian debt loads are increasing, especially for seniors who are increasing their debt loads at a much faster pace than the population at large. This will definitely lead to problems down the road as their incomes are not likely to keep pace. Seniors, defined by Equifax as those aged 65 and older, increased their debt loads by 4.9 percent in the second quarter of this year, which ended in June, whereas the average debt load for Canadians was up by two percent during the same period. The average Canadian senior owed just under $15,000 which does not even include any mortgage debt, but rather it represents debt on top of anything they owe on their homes.
Equifax also pointed out that seniors have been increasing debt for a while, which might partially stem from having to help adult children or other family members with their own financial hardships. But increasing debt in one’s senior years is a troubling sign as most seniors can’t count on a higher income in their retirement than they saw in their working lives.
That’s why I thought it’s timely for RBC to provide tips and resources for boomers and seniors to plan their retirement and control their spending. According to Yasmin Musani, RBC’s Head of Retirement and Successful Aging Strategy, financial education is a lifelong journey – there is always more we can learn along the way, no matter how old you are. “For boomers and seniors who are approaching retirement or living in retirement, it’s important to understand your financial goals, how you can manage your current finances, your sources of income and what to be aware of when it comes to potential financial abuse.”
RBC’s Advice Centre, launched in 2009, currently offers several hundred videos and articles covering a diverse range of financial matters. The Financial Literacy microsite further offers a variety of digital resources, content and tools for people to access anytime and from anywhere they want.
For boomers who are planning for retirement, I also like the advice offered online by CIBC’s Advice Centre on their website – retirement planning for more than five years out and retirement planning for less than five years out. With so many aging boomers unable to retire due to lack of savings, both short-term and long-term planning are key to a better life in their golden years.