As a senior, you’ve been working with your finances for decades. Managing your budget, saving for retirement, putting your kids through college—you planned and saved for years, and now you’re reaping the rewards of that financial responsibility.
However, becoming a senior and going from the working world to that of retirement doesn’t mean you can let that vigilance go. In fact, in some ways it might be even more important to keep a close eye on your money when you reach your later years.
From making sure you have enough money to support your lifestyle in retirement, to putting money away for future healthcare costs, there are lots of financial issues that seniors have to pay particular attention to. To help you along, here are our top five financial tips for seniors.
- Work with a financial advisor. Often, individuals who worked with financial advisors during their working years decide to forgo the advice of a professional once they retire, instead relying on family members for help.
- Be alert to potential fraud. It’s easy to think that you’re immune to financial fraud, but think again. Everyone, no matter how savvy they may be, can fall prey to fraud, especially since technology has given dishonest people a whole new set of opportunities to take advantage of well-meaning individuals. Seniors are particularly at risk because scam artists see them as easy targets.
- Continue good financial practices, like budgeting and saving. Now that you’ve reached the freedom of retirement, it can be tempting to “take a break” from the very financial habit that got you where you are today.
- Put off taking Social Security benefits, if you can. Conventional thinking dictates that as soon as you retire, it’s time to start drawing Social Security. If you wait, however, you can get a lot more out of those benefits—according to this NerdWallet article, your benefits will grow by up to 8 percent every year until you reach age 70. Cost of living adjustments will be included, too.
- Evaluate and plan for your healthcare costs. Healthcare costs are a concern for people of every age, but they can loom especially large for seniors—especially if long term care or care for terminal illness appears on the horizon. Ensure that you have money put aside for funding these costs—the best way to do this is to, again, work with a financial advisor.
While this can work well if a family member happens to be a financial professional, in general it’s a good idea to work directly with an advisor. Financial advisors can be of huge help when it comes to navigating investment strategies, deciding how you’ll fund healthcare costs or long term care, or looking into the possibility of a life settlement.
Always remember that if something sounds too good to be true, then it almost certainly is.
But that’s a dangerous attitude. Knowing where your money is going is even more important now, since you don’t have money coming in regularly from working.
It’s important to keep an eye on your portfolio, review and change your investment strategy when necessary (preferably with the help of a financial advisor), and don’t spend more than you’re withdrawing from your accounts. Mired in debt is no way to spend your later years.
On the other hand, if you withdraw before full retirement age, your benefits could be permanently reduced by as much as 25 percent.
It’s also important to look at your health insurance plan. With the passing of the Affordable Care Act (ACA), insurers have to pay for lots of preventive services that seniors used to have to cover themselves, like colon cancer screenings, flu shots, screenings for cardiovascular disease and diabetes, and an annual wellness exam. Prescription medication costs have also gone down as a result of the ACA.
Make sure you’re taking advantage of these offerings—not only will they save you money in the short-term, they’ll help you maintain your good health longer, saving you money in the long-term as well.
Seniors know what it takes to build a financially secure life, and they should continue to use the same good financial practices that got them to retirement once they enter their golden years. By staying on top of expenditures and savings, being alert to potential scams, planning for healthcare costs, and staying abreast of options like life settlements, seniors can ensure that they are as secure in retirement as they were while working.
Do you think a life settlement might be part of your retirement plan? Ask your financial advisor to contact Ashar Group today!