TD survey reveals both young and old Canadians are financially unprepared for death, divorce and illness
TORONTO, Oct. 19, 2016 /CNW/ - For Canadians coping with unforeseen life events, emotional stress is not the only consideration on their minds. According to a recent TD survey, many Canadians experience financial stress when they or an immediate family member suffer from a serious illness (61 per cent), death of their partner (43 per cent) or divorce (46 per cent). Trying to sort out finances while dealing with a serious life change can distract from what's important, such as health and family, which is why it is essential to plan ahead, as well as have a strong support system in place when emotional and financial stress strikes.
"Whether you're a young adult who's trying to establish yourself, or an older individual enjoying retirement life, the best time to plan for the unexpected is before the unexpected has happened," says Lee Bennett, Senior Vice President, TD Wealth Financial Planning.
Bennett stresses planning ahead is always important, but particularly so when it comes to undesirable scenarios. According to the TD survey, three groups stood out as benefiting from planning ahead.
The Silent but Stressed Generation
Almost seven in 10 Canadians (67 per cent) in the Silent Generation (Canadians between 70 and 90 years of age) said their top financial worry following the death of their partner was, or would be the impact on their lifestyle. Other stresses identified by these Canadians include outstanding financial debt (31 per cent) and their retirement plan (20 per cent).
Bennett explains that planning ahead to ensure you and your spouse have a will in place and have shared your wishes for your estate will help reduce stress if one of you passes away. "It's an important conversation to have with one another while you're both alive," said Bennett, "in order to feel reassured that the other person will be taken care of after you're gone."
Family therapist Renee Climans has been helping Canadians overcome difficult life changes for more than 30 years and adds that it is beneficial to seek out guidance to help overcome hurdles that can surface when losing a spouse, regardless of your age.
"People will often associate asking for help as a sign of weakness, which is not at all true," said Climans. "Surrounding yourself with friends and professionals who can offer financial, emotional or logistical support in the face of death allows you to focus on what matters most – taking care of yourself."
Unhealthy and Full of Heartache
Having a support system is important in many situations, particularly when you are facing serious illness. The TD survey found Canadian women are more likely than men to experience financial stress when dealing with serious illness (64 per cent compared to 57 per cent).
The top stressor cited by women dealing with financial stress during their own or an immediate family member's illness was worrying about the inability to pay bills (68 per cent), followed by managing outstanding debt (33 per cent) and the ability to support family (33 per cent). Bennett recommends having a three- to six-month emergency fund in place to help ease these worries.
If you don't have backup funds set aside, there are steps you can take over the course of an illness to manage additional financial pressure. "Managing the financial burden that illness can present is never easy and many people are not sure where to start," says Bennett. "Look for ways you can liquidate funds or free up cash flow to help cover additional costs that arise with treatments and medications." Bennett adds that a financial planner can help you assess your financial options and determine the best course of action when an unexpected illness arises.
Young and Divorced
Many Canadian Millennials and Gen-Xers are balancing a number of priorities – from finishing school and establishing a career to getting married and raising a family – so when an unanticipated separation or divorce occurs, many find themselves both financially unprepared and consequently, stressed. To help reduce financial stress, nearly one quarter (23 per cent) of divorced or separated Millennials or Gen-Xers delayed their divorce/separation because of unexpected costs.
"The thought of divorce can be scary, as it can easily derail your savings plans and significantly impact your financial future," says Bennett. "If you find yourself down a difficult path, work with a professional to help lead you in the right direction. Whether that means splitting assets right away or continuing to live together while you save up some money, a Financial Planner can help assess your immediate needs and revisit your goals in order to develop a plan that will help achieve those objectives."
For Canadians going through a breakup, a Financial Planner can manage financial implications and you may also want to consider engaging a mediator or therapist to help keep things civil while parting ways. Climans stresses that building a support system can make the process of managing a breakup less emotionally and financially stressful. "When emotions are running high, finding a third-party to help resolve differences can help couples end their relationships on amicable rather than adverse terms," she says.
Regardless of the challenge you may experience throughout life, both Bennett and Climans agree that some preemptive planning and having the right support system in place can help you cope with the unexpected and be on your way to creating a bright future.
About TD Financial Stress Poll
TD Bank Group commissioned Environics Research Group to conduct a custom survey of 6,337 Canadians aged 18 and older including three different subgroup of Canadians for this report. Part A includes all Canadians, with a subgroup of 970 who have suffered or had a family member who suffered a serious or life-threatening illness, including 529 women. Part B is a subgroup of 4,076 Canadian widows and those who are living with a partner, included 83 from the Silent Gen, while Part C is a subgroup of 1,242 Canadians who have been divorced or separated including 337 Millennials and Gen X. Responses were collected between February 25 and March 17, 2016.
About TD Bank Group
The Toronto-Dominion Bank and its subsidiaries are collectively known as TD Bank Group ("TD" or the "Bank"). TD is the sixth largest bank in North America by branches and serves approximately 25 million customers in three key businesses operating in a number of locations in financial centres around the globe: Canadian Retail, including TD Canada Trust, TD Auto Finance Canada, TD Wealth (Canada), TD Direct Investing, and TD Insurance; U.S. Retail, including TD Bank, America's Most Convenient Bank, TD Auto Finance U.S., TD Wealth (U.S.), and an investment in TD Ameritrade; and Wholesale Banking, including TD Securities. TD also ranks among the world's leading online financial services firms, with approximately 10.8 million active online and mobile customers. TD had CDN$1.2 trillion in assets on July 31, 2016. The Toronto-Dominion Bank trades under the symbol "TD" on the Toronto and New York Stock Exchanges.
SOURCE TD Wealth