Why prescription overload is a serious health risk for seniors, how home ownership can help in retirement, and information on executor fees

Prescription overload is becoming a growing concern for those 65 and older.SelectStock/iStockPhoto/Getty Images

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It was while working in acute care at the McGill University Health Center that the epidemic of overmedication among older Canadians became apparent to physician Emily McDonald.

“We were seeing older people coming in with fall fractures, hip fractures, delirium, confusion,” says Dr. McDonald. “And a lot of it could be fairly easily attributed to the drugs or combinations of drugs they were taking.”

Going through the list of prescription medications they were taking, it was clear that many were not appropriate, she said. The diagnosis was prescription overload.

“It’s a huge problem,” says Dr. McDonald, associate professor of medicine and director of the Clinical Practice Assessment Unit in General Internal Medicine at the McGill University Health Centre.

“More than half of people over 65 take more than five medications and when you look at long-term care facilities – the most vulnerable people – they take at least 10 medications a day. Dene Moore Reporting

Has this baby boomer couple saved enough to retire?

Margaret, 61, recently retired and her husband Simon, 70, retired five years ago. Although neither has a pension, they have a home in the Greater Toronto Area, a cottage, and substantial savings.

“We are seeking advice on how to tap into our assets for the best tax benefit and the longevity of our funds,” Margaret wrote in an email. Over the past year or so, they have withdrawn $100,000 from their savings to lend to their daughter to help with a down payment. In addition, they bought a new truck.

In the short term, they have foundation work to do on their chalet and they are planning a trip to Europe.

Simon withdraws $16,800 a year from his registered retirement income fund. He receives $12,170 a year in Canada Pension Plan benefits and $8,255 in Old Age Security benefits. Margaret recently converted her Registered Retirement Savings Plan to a RRIF and is wondering how much she should withdraw. She also wonders when to start collecting CPP and OAS benefits.

Their retirement spending goal is $8,000 per month, or $96,000 per year, after tax. Have they saved enough?

In The Globe’s latest Financial Facelift column, Matthew Ardrey, vice president and portfolio manager at TriDelta Financial in Toronto, reviews their situation.

In case you missed it

Why friendships are even more important in retirement

Retirement is a time to pick up old hobbies, try new activities, and travel the world (when there’s no pandemic to worry about). But amid all these life changes, maintaining one key constant makes the difference: relationships with friends.

Retirees without close ties to friends and family are at greater risk of physical and social isolation, notes a recent survey by Edward Jones. He cites a Statistics Canada report showing that one in four adults over the age of 65 are socially isolated, with too little contact and interaction with others. The pandemic has prompted more Canadians to pause and reflect on what matters most to them in life, according to Edward Jones’ report, and connecting with friends and family is high on the list.

Retirement is “a sacred time for friendship” — and that was long before the pandemic hit, says psychologist and friendship expert Marisa Franco. Not only is there more time to spend with other people, but friendships tend to be more fulfilling during a person’s retirement years. Reporting by Josie Kao

Why More Advertisers Should Target Baby Boomers

The words and actions of baby boomers are powerful, given that they make up a large portion of the population and have more financial power than younger generations after decades of accumulating wealth in cooperative stock markets and rising real estate prices. It’s a generation with a lot of influence – but you wouldn’t know that from watching mainstream advertising, where the focus is overwhelmingly on young people.

A focus on younger demographics might have made sense decades ago, when brand loyalty was a thing and advertising could create a customer for life — but that kind of devotion is long gone. “Once you hit 55, it’s like you don’t see a creative brief, media buy, or research targeting someone that old. It’s like you’re falling off a cliff” , says Jeff Weiss, CEO of Age of Majority, a consultancy for marketers looking to tap into older consumers in Canada and the United States.

According to research by the consultant, who splits his time between Boston and Toronto, marketers are missing out on billions of dollars in sales by neglecting “active seniors” over the age of 55. Paul Brent reports

What else we read

The world’s population is aging faster than expected (and why Canada must be ready)

Amid the global pandemic and other alarms, few of us have noticed a milestone that will influence the shape of the world to come, says The Globe’s John Ibbitson in a recent article written with Darrell Bricker, the chief executive of Ipsos Public Affairs.

India is no longer having enough babies to support its population. The National Family Health Survey, conducted every five years, found that the total fertility rate in the world’s second most populous country had fallen to 2.0, below the replacement rate of 2.1 children per wife.

Within a generation, once the current cohort of young women stops having babies, India will join the ranks of the world’s countries with declining populations.

In their 2019 book Empty Planet, Mr. Ibbitson and Mr. Bricker note that they predicted the world’s population would peak at a much lower level and begin to decline much sooner than United Nations projections. Their predictions are coming true. Now we must prepare for the consequences, they write.

An aging and declining global population will have many environmental benefits, such as easing pressure on food supplies and contributing to efforts to contain global warming. But it has major implications for Canada and other countries that have low fertility rates and rapidly aging populations.

A single senior sells her house – is she financially ready for life?

Homeownership is not a retirement plan, Globe personal finance columnist Rob Carrick writes in this article.

But sometimes things happen that way. He quotes a reader whose mother-in-law recently sold her house for around half a million dollars. The 68-year-old is described as receiving about $600 a month from Canada Pension Plan and Old Age Security, with little personal savings.

“The proceeds of the house should last for the duration of his retirement, including rent, health care, etc.,” the reader wrote to Mr. Carrick. “How can I build a suitable portfolio for him? Which online platform should we use? What is a reasonable withdrawal rate? »

Ideally, this reader’s mother-in-law would have retirement savings to draw on so she wouldn’t be dependent on the sale of the house. Homes can figure into your retirement planning, but it’s nice to be in a position where selling and downsizing is done for lifestyle reasons more than financial necessity.

ask sixty-five

Question: How are executor fees calculated? I heard that there are different percentages depending on the estate and not all assets are included when you calculate them. Can you explain in more detail how this works?

We asked Susan Mabley, Head of Private Trust, TD Wealth Management, to answer this question:

An executor is generally entitled to fair and reasonable remuneration for the administration

a domain. Ideally, the will provides guidance on the calculation of compensation, but if not, the executor should consult provincial rules for prescribed rates.

Rates and the basis for calculating fees vary by province, but the common law that has evolved in most provinces provides for a fee of approximately 5% of the value of the estate (for example, 2.5% of all assets collected, then 2.5% of assets distributed). If an estate was valued at $1 million, the executor’s fee could be $50,000.

Assets held in the name of the deceased only are generally included in the value of the estate. Assets passed directly to a designated beneficiary, such as an insurance policy and registered plans, are generally not included in the calculation of the executor’s fee.

As an executor, it is essential to maintain accurate accounts and records of all assets, expenses and decisions made; accounting must be shared with beneficiaries prior to distribution, including calculation of executor’s fees.

Beneficiaries can challenge the executor’s fee through legal proceedings, and the courts can adjust the fee based on (a) the size of the estate, (b) the care and responsibility involved, ( (c) the time required to administer the estate, (d) the skill and ability demonstrated by the executor, and (e) the success of the trustee.

Executors, such as trust companies, generally have a published fee schedule with decreasing percentage rates based on the value of estate assets and most start at rates below the “rule of thumb” of 5 %. Many estate executors also offer discounts based on assets already held by the financial institution. The fee schedule is built into the will (in most cases) eliminating any confusion about fees.

Any fees charged by an executor are treated as income for income tax purposes for the executor. There are other approaches to paying an executor, such as making a specific bequest to the executor in the will; this bequest would be treated as an inheritance rather than income.

To ensure that the right solution for you is written into your will, it is important to seek advice from estate and tax professionals who will take into account all the particular nuances of your situation.

Have a question about money or the senior lifestyle, or want to suggest a story idea for the Sixty Five series? Please email us at sixtyfive@globeandmail.com and we’ll find experts and answer your questions in future newsletters.

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