What happens when you can't trust yourself or a close family member to do the right thing by your finances? That's a scary prospect.
As RRSP season once again focuses attention on retirement planning, I've noticed several newspaper articles along the lines of the one in The Wall Street Journal headlined: "How to Protect Your Future Self From Financial Abuse."
The problem: Trusted but self-serving family members,
impatient to inherit, could influence an elderly relative
to turn over funds. And such a relative - most commonly it's a son - with power of attorney could simply take the money.
Dishonest financial institution employees could recommend actions that benefit them rather than their clients.
Scam artists and other criminals could convince people - and this is certainly not restricted to only the elderly - to invest or spend unwisely.
And finally we ourselves
could become mentally incapacitated or simply not as aware and knowledgeable as we used to be - bad enough in itself but disastrous when combined with any of the other threats to our financial well-being.
The solution: Being aware of the risks is a start. Then make a list of all your investments and other assets. Try to simplify - for example, close little-used accounts and otherwise consolidate your finances.
Choose a trusted
individual who knows about your finances - somebody (family member or professional) both you and your advisers can turn to in case of any unusual events caused by the threats listed above.
While nobody will take as great an interest in, or be as affected by, what happens to your finances, it's important to take every step possible to safeguard those finances.
You protect yourself in many ways already - from something as simple as
taking an umbrella with you in case of rain to car and other insurance to perhaps a security system in your home.
Now it's time to make sure you also protect your finances. Your future depends on it.
Mike Grenby is a columnist and independent personal financial adviser; he'll answer questions in this column as space allows but cannot reply personally. Email mike. [email protected]
