'Cognitive Decline' And Its Financial Early Warning Signs . . . | Your stories | Discussion forum

We may have discussed this in threads in the past but it is a good reminder and the link does a pretty good job of the main 'red flags'. I am a senior senior soon to be an octogenarian and have prepared best I can. To comment on the 5 points:

1. Absolutely went to auto payment as much as possible years ago. Only a few recurring things remain for 'manual initiation' and that is property taxes, income tax owing Apr 30, and my auto insurance/registration which needs signatures anyway. Even my tax instalments to CRA are set on auto-pay. I have Enduring POA for a family member. I took on that responsibility on condition he put everything he could on auto-payment.

2. Not much anyone can do about it if I fall into that trap, other than my POA recognizing my decline and persuading me to hand over the reins.

3. Similar to 2 above. I do have 'trusted contacts' set up for my brokerage accounts, all of which however are self-directed. I am however not convinced there is sufficient brokerage oversight of such accounts vs advisor managed accounts. Again, it would be best for me to soon give my POA trading rights so that he could see/monitor my actions in my brokerage accounts.

4. I am not a believer in adding an offspring as a JTWROS owner of any of my accounts for all the reasons stated. I view Enduring POA as the proper way to do this.

5. I have had updated Wills, and enduring POA, in place for decades. This includes digital Wills and the proper lists of assets and where held, access to my Password Manager, and guidance via IPS (Investment Policy Statement) for my investment accounts.

Not explicitly stated but similarly important as one ages. Simplicity is key. Avoid proliferation of accounts (bank and investment) and keep investment accounts simple with minimal holdings of ETFs.

AltaRed said
keep investment accounts simple with minimal holdings of ETFs.  

Agreed with your strategies, which essentially are consistent with mine, but would like to understand your reason for minimal holdings of ETF's.

Thanks,

Stephen

Nehpets said

Agreed with your strategies, which essentially are consistent with mine, but would like to understand your reason for minimal holdings of ETF's.

Thanks,

Stephen  

The reality today (since about 2018) is one only really needs one ETF in each of their investment accounts if one chooses one of the Asset Allocation ETFs as described here https://www.finiki.org/wiki/As.....cation_ETF obviously assuming one agrees with the global asset slices, or any one of the model portfolios described in https://www.finiki.org/wiki/Si.....portfolios

The point being if one picks broad based index ETFs any more than a few creates overlap. There have been many, many discussions on forums like Financial Wisdom Forum and Canadian Money Forum about various combinations. A very popular thread at FWF is 'VBAL Everywhere' which is a 60/40 balanced solution (or XBAL or ZBAL if one prefers).

Another solution is to separate equity and fixed income because some folk do not like bond ETFs and thus they might use VEQT or ZEQT or XEQT and then a GIC ladder for fixed. Others may want to have their own Canadian equity component and so go with XIC (Canada), XAW (rest of world) and then a fixed income ladder of some sort.

The combinations are endless but the point is that there is minimal decision making that needs to be with holdings the simpler it is. That negates much of the nonsense that exists in literature and mass media about stock picking.

I assist my ex-spouse with her portfolio and she had 6 ETFs only, and 6 only because of some legacy ETFs from 15+ years ago and it would cause too much cap gains tax to consolidate. She has only 1 ETF in her TFSA (VEQT) and only one ETF (VCNS) in her RRIF.

Not wanting to stray far off-topic, but to address Norman1's point, I have negligible cash balances in bank accounts, and negligible cash in investment accounts because I sweep all the monthly distributions out to chequing to pay bills. So an Executor could face the same issue, i.e. inability to source funds from a brokerage account to go to the Estate bank account to fund estate expenses.

However, I think a brokerage MIGHT consider an executor's request to sell units of a brokerage ISA to withdraw and fund estate expenses, if for no other reason than brokerage ISAs are in fact deposit accounts insured by CDIC, but use the mutual fund system as the means to deposit or withdraw funds. It might need to be facilitated by a bank branch manager making the request to the brokerage do so, assuming of course the brokerage is simply another division of the same corporate family. That remains to be seen.

The above issue is distinct and separate from an Executor's ability to request a brokerage to 'go to cash' to preserve estate capital as long as the capital remains in the brokerage account. Some 11 years ago when my mother passed, I (as Executor) was able to get RBC Direct Investing through a Letter of Direction to sell her RBC equity mutual funds and place the proceeds in RBC DI HISA RBF2010 within the brokerage account to preserve the estate's capital.

Regardless, I think it is incumbent on us to increasingly simplify our financial affairs as we age to lessen the workload of either a POA or an Executor to manage our affairs. I cannot quite imagine being a POA to an individual with 10-15 separate accounts scattered everywhere and having to undertake significant work to consolidate them to something manageable. I wouldn't impose that hardship on my POA who really would be doing this out of the goodness of his heart while trying to juggle his own life. If one has complicated affairs, it would be best to get a Trust company to be POA (and even Executor).