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Tuesday, April 20, 2010

Financial issues of Senior Citizens and Recommendations

The financial dilemma is common among senior citizens who are usually relegated to an abject position of economic inactivity. Lack or absence of financial capacity creates a stressful life and invites the entry of problems other than physical and mental health issues. For instance, domestic problems in an extended family system can aggravate the problem of a financially-destitute senior citizen. Should any of the children be wallowing in a similar state of poverty, the senior citizen becomes physically and mentally loaded up with intense and continuing pressure out of being totally helpless to come to the financial rescue a grieving son or daughter.

While it may not be the panacea to aging-related problems, the value of money cannot be overstated in the post-retirement period. A financially-handicapped senior citizen, afflicted with some degenerative or serious illness, is practically on the road to an early death.

A financially secure senior citizen with the same illness, however, may have a longer life to live because money can give quick and convenient access to life-giving remedies. Even with state-of-mind dysfunctions like severe depression, boredom, nervous breakdown, and self-pity, financial capacity can buy options to rejuvenate and refresh a financially-capable senior citizen, through travels, elderly recreation, social renewal, and continuing education. A poor senior citizen in the same state of mental degradation cannot afford to do the same; and more so, be back into the mainstream of society.

Financial hardships can be avoided if the senior citizen, during his or her period of economic activity and utility, had deliberately exercised foresight, focus, continuous learning, perseverance, and simplicity, a discipline that consistently upholds the importance of modest needs, savings, productivity, competence, and delivering superior value to people and organizations. The idea here is to build a sustainable wealth of lifetime resources to address the financial requirements of the person across the twilight zone.

Financial Exploitation and Senior Citizens

Financial abuse and material exploitation of the elderly may not cause physical injuries or leave scars, but they can have devastating effects and ruin the lives of victims. An elder’s entire life savings can disappear, leaving the victim unable to provide for his or her own needs and causing harmful stress and agitation.

Financial elder abuse and material exploitation occur when an abuser uses an elder’s money or assets in a manner contrary to elder’s wishes, needs, or best interests, or for the abuser’s personal gain. Oftentimes, elderly victims are exploited because of vulnerabilities associated with advanced age, such as impaired mental capacity. Abusers can be caregivers in nursing homes or assisted living facilities, professionals hired by the elder (such as accountants), strangers, or family members.

Financial elder abuse can take many forms. The abuser may steal money or items from the elder’s bank account or home, sell or transfer property against the elder’s wishes, use the elder’s credit cards for unauthorized purchases, use the elder’s name to open new credit accounts, and create or alter a living trust or will for the abuser’s benefit. Financial elder abuse also can take the form of telemarketing fraud, identity theft, predatory lending, home improvement scams, and estate planning scams.

Unexplained behavioral changes, such as sudden secrecy or reluctance to speak freely, may be warning signs of financial elder abuse. If an elder appears withdrawn, helpless, frightened, or angry, this may also indicate that abuse is taking place.

Factors which make elders susceptible to financial abuse include isolation, loneliness, physical and/or mental disabilities, and lack of familiarity with financial issues. Elder financial exploitation often goes unreported. The senior may be unaware that exploitation is taking place or remain silent due to intimidation by the abuser. The elder victim may also be embarrassed about the situation or worried that making accusations will cause him or her to be labeled senile or too demanding.

Financial abuse perpetrated against a senior may include:

· Misusing or stealing assets, property or money.

· Cashing cheques without their authorization, forging a signature for any reason

· Misusing a power of attorney.

· Pressuring a senior into making changes to their will.

· Pressuring a senior into signing legal documents when they do not understand what it is.

· Sharing a home with the senior without paying expenses when requested.

· Transfer of Property : SRA schemes

· Forced / Forged Gift Deed


· Uniform Age: Senior Citizen must be defined as one who is 60 plus

· Mobility problem

  • Signatures on checks and documents that do not match

· TDS for retired elderly : why Elderly need to pay numerous TDS

· Numerous deduction by banks and financial institute in name of service: ATM withdrawal, number of chq book , number of transaction , minimum balance , account statement , renewal of credit card / debit card

· Single window policy, people have to run for pillar to post

· Medico legal problem: like person suffering from Dementia

· NPS: encourage more saving / participant for young people

· Reverse Mortgage: more clarity on interest rates and process should be single window

· Post office financial instrument should be made more attractive and efficient

· Grievance for UTI / LIC / NSE / Mutual funds

Recommendation for Govt:

· Immediate implementation of Senior Citizens Maintenance Act 2007

· Implementation of NPOP

· GOI should consider all stakeholders while revision of NPOP

· NPOP should consider different needs of different age groups : Young Old , Old old and Very Old

· Action on BC’s / Chit Funds / Plantation / Plots – Fraud schemes

· Cyber Crime protection

· Fast Track court

· Indira Gandhi Pension Scheme increase premium

· Aarogyasri Healthcare Insurance Scheme for BPL / APL

· Concept of Universal Coverage: irrespective of age, health conditions or claims history must be covered under the Scheme

· Renewal must be automatic, without any limit of upper age

· Cashless Service must

· More Public Pvt Partnership

· Property transfer safeguards

· Ethical Will concept

· Advance Directive – Will: Advance directives are a way of making your voice heard when you can no longer speak. They allow you to appoint someone to make your health care decisions for you when you no longer can and to administer or withhold treatment and procedures.

· Special Elder abuse Law

· Non Bailable Elder Abuse Law

· Property tax rebate

· There should be a mentoring Agency for Old Age Homes and Retirement Communities

· A National Level Elder Helpline (Four digit Code) must be set up

· Elders’ Right similar to Child Rights must be recognized

· National Elders Commission (similar to National Women’s Commission) must be set up

· Separate Ministry for Senior Citizens Welfare is necessary

· Intra Ministry work

· National Association/ Federation of Older Persons must be identified and established

· Separate and adequate funds must be allotted for Senior Citizens Welfare

· Both States and Central Govt must allocate funds for senior welfare

· Old Age Pension must reach all deserving persons

· Tax concessions must be given to care givers and those who take care of elders

· Separate Medicare policy must be available for older persons.

· Geriatrics and gerontology must be taught in MBBS, PG, Nursing, MSW, etc

· Special attention must be paid for training Bed side Assistants

· There must be geriatric wards in District Hospitals

· There must be Day Care Centres in every municipality

· There must be Old Age Homes for destitute in every Municipality

· There must be Day care centres for Dementia patients

· Pension and Gratuity amount can’t be gifted to any one for minimum 5 yrs of receipt

· Post office can be made central point of all govt related financial schemes

· Annapurna / Meal at doors / Mid day meals

· Legal AID Cell in all Law college / District courts

Recommendation for Civil Society:

· Micro Finance: as SHG for women

· Training / Sensitization of professionals: legal, medical, police, govt. Servants etc

· Financial clinic

· Legal clinic

· Empowering common man about Financial Rights

· Pre Retirement workshop: Financial planning for young

· Encourage more Hobbies and skill

· Formation of Vigilance Committee for Elder Abuse in our communities

· Joint / United forum of organization – NGO’s and other stake holders

· Mapping of services for elderly in each municipality/ district

These were some important points for discussion by Silver Inning Foundation for Moneylife Foundation brain storming session on financial issues of Elderly in India.

Sailesh Mishra

Founder President

Silver Inning Foundation




jessica said...

Excellent stuff with wonderful information! it helps a lot...There is lot of helpful information within those links....Thanks for this nice post....


Adam Puff said...

I agree with Jessica, this article is very helpful.

I wrote an article about ways to stay sane in a crazy market that may also be of use for anyone trying to "keep their cool."

Check It Out:

Adam Puff said...

I also wrote an article that helps those trying to take money out of their 401(k) plan.


John Decker said...
This comment has been removed by the author.
John Decker said...

This is a great article. Many senior citizens deal with financial situations due to many factors such as retirement and low income. This is the time where savings and stored away money can be very crucial and important. These are some great recommendations but senior citizens can also open a credit union checking account. With these great competitive rates and loan, their existing money can be safe and they also having plenty of lending options which are easy to apply for.

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