Certified Financial Planner Cindy Couyoumjian Looks at 3 Principles of Teaching Seniors Financial Literacy
As America’s population ages, research has revealed a disturbing truth: many seniors don’t have the financial literacy skills they need to protect their assets, preserve their lifestyle, and avoid being taken advantage of by criminals or financially abused by family members and caregivers.
And exacerbating this massive knowledge gap is the unavoidable fact that aging gradually diminishes memory, cohesion, comprehension and cognitive ability; all of which are necessary to make smart, safe and sound financial decisions. A study at Boston College’s Center for Retirement Research found that starting at age 60, the average individual’s capacity to grasp and apply financial concepts declines one percent each year.
With this being said, it is never too late for seniors to learn — or in some cases, re-learn — the fundamentals of financial literacy. Here are three principles that educators should focus on according to Certified Financial Planner Cindy Couyoumjian:
1. Consolidate the financial portfolio.
Many seniors have investments and plans scattered across multiple financial advisors. Consolidating all documents, debts and holdings in a single, centralized portfolio provide a clear picture of where things stand today — and where they are headed tomorrow.
Adds Cindy Couyoumjian, who is also the Founder and CEO of Cinergy Financial, an investment firm based in Tustin, California: “Ideally, seniors have a trustworthy and competent spouse, child, relative or other caregiver who can help them pull all of their financial data together. If not, then seniors should work with a qualified and certified financial planner who is ethically and legally obligated to do what is in their clients’ best interest and is accountable for the advice they give and recommendations they endorse.”
2. Build a realistic plan.
Whether they are still in the workforce (full or part-time) or have retired, seniors need to take a clear, long and in some cases difficult look at their financial profile, and use that information to build a realistic life plan that may require downsizing, selling assets, or moving into a care facility because it’s both safer and more cost effective.
Cindy Couyoumjian states: “Many seniors are very upset to discover that their company pension and Social Security are not going to be enough to maintain their current lifestyle — especially with rising healthcare costs and inflation on everything from food to utility bills. However, as painful as the process is, seniors — ideally with the help of competent caregivers and a Certified Financial Planner — need to build a realistic life plan that is going to make sense for the next 10 or 20 years. Otherwise, seniors may find themselves forced to make drastic changes that are both physically and emotionally difficult, if not in some instances quite painful and traumatic.”
3. Beware of strangers telling tall tales.
Last but certainly not least, a growing number of criminals are preying on seniors. Research has shown that an estimated five million older Americans each year are victimized by financial fraud and scams. The problem is so pervasive and devastating, that the U.S. Centers for Disease Control and Prevention (CDC) has declared elder financial exploitation as a public health crisis.
Concludes Cindy Couyoumjian: “Just as children are taught to beware of strangers, seniors need to be educated — and in some cases, respectfully monitored in one way or another by their children and other caregivers — to ensure that they don’t end up losing their money to strangers who prey on their fears or aspirations. Often, the motivation for seniors who are victimized by these scams is not greed. Rather, they simply want to be smart with their money, and have something to pass along to their family.”