Getting older isn’t something that should be viewed negatively and looking at a few of these financial tips for seniors can help you alleviate any stress you might have about funding a fruitful retirement.
If you’ve spent your whole life working hard to provide for those golden years, it’s time to kick back and make the very most of it.
Since everyone has entirely different needs and varying degrees of capital, we’re not going to try telling you how to invest your money. We’ll focus instead on core areas where a little effort can make your life a whole lot easier. This, after all, is one of the primary goals of retirement!
Financial Tips For Seniors
Before we begin, we should stress that what follows is only general guidance.
You should seek the services of a qualified financial professional to ensure you have everything in place to get the best from retirement. Educating yourself about finance is only part of the journey and no substitute for professional advice.
We’ll kick off with the absolute basics: keep an eye on money coming in and expenses going out.
1) Budget Closely and Track Expenses
The most solid foundation to work from is a retirement budget and spending plan with all contingencies factored in. Life can throw you many curveballs, it’s crucial to expect the unexpected.
Be realistic with your budget. It’s usually the case, unless you’ve planned carefully, that your retirement income won’t hit the levels of your peak earning years. Limiting expenses is a necessary evil and a tight, comprehensive budget allows you to maximize your nest egg.
Monitoring your budget to make sure you stay on track is just as important as formulating the financial plan in the first place. Fail to do this and budgeting is essentially a hollow promise to yourself rather than a meaningful way to stretch funds efficiently.
With more time on your hands, entertainment costs are likely to be higher but sensible cuts like taking advantage of senior meal deals or heading to the matinee instead of the evening movies can shave off a few bucks.
And look on the bright side: while entertainment costs might spiral, all those work-related costs like expensive deli lunches will be a thing of the past.
2) Never Stop Learning About Finances
Financial literacy almost inevitably leads to more sound investments, superior money management and greater wealth preservation.
You don’t need to be an economics major and you don’t need to spend your days poring over the Wall Street Journal either. Keeping an interest in the way you invest your money along with developing an understanding of the risks involved will likely lead to a better return on investment.
As with anything in life, it’s never too late to start either. If you’ve never really paid too much attention to how money works, make productive use of some of that free time that opens up during retirement. Learn how to make your money work for you.
3) Automate Your Finances
One of the less positive aspects of retirement is the probability of at least some form of cognitive decline.
Streamline your finances by automating all sources of income from pension funds and Social Security through to any disability payments or investments. Direct deposits into your account can save you from a world of pain.
Adopt the same approach with any money leaving your account. Arrange for all bills and payments to be made automatically on the day of the month that suits you best. Build in a buffer zone so you don’t get caught short if an expected source of income is delayed. Rejected direct debits attract penalty charges and there’s no need for this to happen.
4) Rein In The Generosity
Helping your children and grandchildren financially is a delicate financial tightrope to walk at the best of times. Naturally, you want to do everything possible to give them the best start in life but don’t feel remotely guilty about placing your own interests uppermost.
Prioritize protecting your own financial well-being first and then look at how you can help family members.
If you end up giving away more than you can reasonably afford, you’ll not only burden your own fragile retirement finances but also likely strain relationships.
We’re not saying don’t help out, just make sure it’s on your own terms and in your own best interests.
5) Set Up a Power of Attorney
Establishing a power of attorney is straightforward and a must as you push through into your retirement years.
A power of attorney allows a family member to manage all your financial affairs on your behalf if you’re unable to do so yourself. This could just be a temporary blip if you’re incapacitated after taking a tumble or having a minor accident. If cognitive decline sets in, a power of attorney can be useful on an ongoing basis.
Where a will serves to ensure your wishes are respected when you’re no longer here, a power of attorney makes certain that happens while you’re still alive.
To mitigate any risk of fraud or mismanagement – and this does occur, unfortunately – you could consider appointing more than one agent to carry out your wishes.
All you need to do to set up a power of attorney is complete the relevant forms for the state you live in, have them reviewed by a lawyer then signed by you and your appointed agent(s) in the presence of a notary public.
6) Consider a Medical Plan
Healthcare costs and general medical expenses can punch a dramatic and ugly hole in your budget.
When you’re planning retirement finances, take into account all existing medical expenses but also look forward and consider the almost inevitable costs that will crop up as you advance in years.
Medicare improvement plans tailored for seniors can bring out of pocket costs down and dilute some of the pressing medical expenses that can soon leave you running out of money however diligently you’ve planned.
The best overall advice to bear in mind when mulling over future medical costs is to hope for the best but prepare for the worst.
7) Keep a Close Eye on Credit
Federal law entitles you to a free annual copy of your credit report from the major bureaus (Experian, Equifax, and TransUnion). You can request these reports online right here.
Monitoring this data will allow you to make absolutely sure you’re not a victim of fraud, manipulation or outright theft.
8) Avoid Keeping Large Amounts of Cash At Home
Keeping large amounts of cash on hand in your home is a blatant security risk.
Carrying cash is equally hazardous while using credit or debit cards minimizes your liability in the event of any wrongdoing. Most banks and card issuers will decline any transactions that look suspect thereby protecting you before anything goes amiss. Beyond this, federal law limits your liability to $50 if any fraudulent transaction does slide through. Many don’t insist you pay anything at all.
While using plastic might seem unnatural if you were raised in the era of the dollar bill, times change and you should change with them, especially when it benefits you.
9) Ensure Fraud Safeguards Are In Place
Older adults are at heightened risk of any type of financial fraud. If your idea of "phishing is going for a trip on the lake, you’ll understandably be endangered by the millions of scammers looking to divest you of your hard-earned funds.
You can arrange for family members to receive alerts if abnormally large withdrawals are made from your account. You can also make sure your cards are restricted so they’ll only work in designated locations to prevent online fraud.
Speak with your bank about any concerns and they’ll be only too happy to help out. Your financial adviser can also give you some further guidance on safeguarding your precious retirement fund.
10) Make a Will
We understand making a will is tough since you’re forced to face up to the issue of mortality but, as with so many aspects of aging, the ostrich approach is simply not the answer.
Nowadays, you can even make a will online so there’s no excuse to neglect this vital component of estate management even if you’re struggling with mobility.
Make absolutely certain you seek professional advice and keep your will safe and sound once it’s all in place. You can then rest securely knowing all future funds will be disbursed exactly as you intended.
These financial tips can be helpful for everyone, but especially for seniors. As we age, our lives can become more difficult, not only from a financial standpoint but a physical one as well. Many senior citizens have problems performing day-to-day tasks and some may require the help of a caregiver or assisted living facility. If you or a loved one is dealing with age-related issues that may be interfering with daily life, Landmark Senior Living is one organization that can help. If you are interested in learning more please visit our website and schedule a complimentary walkthrough of one of our assisted living facilities in Hobbs New Mexico.