One-third of seniors don’t have money left over at the end of each month. This and other monetary concerns make financial planning especially important for seniors.
About 1 in 20 seniors have experienced financial mistreatment. Since many seniors already face uncertainties and struggles financially, seniors need an understanding of how to plan financially and how to protect themselves from financial risks.
FINANCIAL SAFETY TIPS FOR OLDER ADULTS
Seniors are often the targets of financial scammers. Additionally, seniors can be financially vulnerable due to changing technology and issues related to aging. For example, seniors with hearing problems may struggle with communication about their finances and seniors with memory loss may have trouble managing their budget.
Use these tips to stay financially safe:
Work with a financial advisor (be sure they are licensed and a fiduciary)
Use unique passwords for accounts (and record and store the information electronically or on paper)
Entrust a loved one with access to accounts in case of emergency
Keep finances in multiple secure accounts
Always call the numbers listed on account information (do not return calls as they may be scams)
Get details about financial decisions in writing for review
Check credit reports once a year
Sign up for notifications when payments over a certain amount are made
Never give confidential information, such as a social security number, over the phone unless you initiated the call
BUDGETING AS A SENIOR
Many seniors are retired, which often leads to living on a smaller income than when employed full-time. As a result, they tend to live on a carefully managed budget. The most common living expenses include:
Housing
Food
Medical
Personal care/living assistance
Moving
Travel and leisure
ESTIMATING COST OF LIVING DURING RETIREMENT YEARS
Look up these tools online to better understand planning for retirement budgeting.
Blackrock’s Retirement Expense Worksheet
T. Rowe Price’s Retirement Income Calculator
Social Security’s Retirement Estimator
Mymoney.gov
LIVING WITHIN MEANS
To live within means, seniors can adhere to a reasonable budget by:
Downsizing to save on housing and utilities
Asking for senior discounts on food, travel, leisure, and more
Looking into insurance, supplemental insurance, and health savings account (HSA) options to reduce costs
Reducing insurance, such as auto insurance, by reporting no daily commute as a retiree
Maintaining traditional saving accounts in order to avoid withdrawals from retirement accounts in emergencies or for unexpected large expenses
Restricting credit card spending to maintain more awareness of budgeting and reduce potential credit card fraud
Choosing one account to pay all regular cost of living expenses, while maintaining additional accounts for specific other expenses
Switching to online and automatic billing, direct deposit, and other simple processes that make management easy (and may include incentives for switching)
HOME CARE TIP
Encourage seniors to keep legal documents up to date, especially those giving power of attorney (POA). In the case a senior is unable to manage their own finances, a POA can step in and help. If one is not assigned, such processes are longer and can be costly.
At EPAGA Home Care, our caregivers are thoroughly trained in providing care to seniors and those with disabilities, from companionship to 24-hour care.
For more information on how we can assist you or your loved one, please visit our services page at the link below.