America is home to more than 46 million people who are 65 years or older. By 2050, the number will hit 90 million.
Growing older is a natural fact of life. Time doesn’t stop. Neither does age.
For many older adults, retirement has already kicked in. If you planned well for your retirement, you’ll have little to worry about.
However, now more than ever, it’s time to exercise financial prudence. You don’t want your money to run out at a time when you’re not economically active, right? This is why we’re sharing financial tips that can help you manage your money soundly.
Read on to learn more!
- It’s Never Too Late to Make Financial Plans for Retirement
Although the average age for retirement in the U.S. is 62, not everyone adheres to it. Some people will retire in their 40s and 50s and others will work well into their 70s.
There’s nothing wrong with this. As long as you’re physically able and there’s no one requiring you to retire, you can keep going. However, there’s everything wrong if you haven’t made financial plans for retirement.
The good news? It’s never too late to start planning for retirement. It’s not the best position to be in, especially because raising the money you need to have a comfortable retirement when you’re an older adult already can be a big ask, but it’s doable.
You might want to consult a retirement planner to help you devise a suitable strategy.
- Budgeting Doesn’t Stop
Budgeting is probably the first financial lesson you received as a young adult. When you want to stretch your money, it’s best to draw a budget and stick to it.
In a perfect world, you shouldn’t have to worry about budgeting as a senior. We all hope that we will make a boatload of money during our younger, productive years so that in retirement we will have an endless supply.
This world is far from perfect, though. In a country where close to 50 percent of people aren’t even prepared for retirement right now, it’s easy to conclude that retiring to financial abundance isn’t feasible for most people.
So, then, budgeting doesn’t stop. In fact, it’s even more important for seniors.
Since most seniors aren’t earning an income, you want what you’d saved up for retirement to go the furthest. Your budget should be frugal, especially if your retirement fund isn’t large. Find ways to limit primary living expenses such as housing.
For instance, instead of living in a high-end retirement community where the cost of everything is above the market average, go for lower-cost housing. This way, you’ll leave most of your money untouched, waiting for life’s uncertainties, such as chronic illness.
- Involve Your Partner in Your Financial Planning
If you’re lucky enough to have a spouse, you’re certainly enjoying the perks. There’s nothing as good as having a companion with whom to share your sunset years.
While having a partner will increase your financial expenses if they’re your dependent, it’s prudent to involve them in your financial planning. Tell them about the state of your financial health and how you intend to spend your money. If your plans are compatible, you can make joint financial plans.
- Purchase Life Insurance
If you’ve never had life insurance, or you had life policies that have since expired, you might not see any need to get insured at old age. After all, you’re closer to the end of your life, and insurance companies are known not to sell life insurance to seniors. This isn’t factual, by the way.
You can purchase life insurance as a senior. However, brace for higher premiums.
What if you have a chronic health condition and you’re worried that you’ll fail the life insurance medical exam? Sure, a life insurance company can reject your application because of your health status, but don’t fret. Have you heard about life insurance that doesn’t require an exam?
Non-medical life insurance policies are designed for consumers who don’t want to, for whatever reason, take the examination. You’ll get insured regardless of your health condition.
Purchasing life insurance is especially important if you have people who depend on you financially. And even if you don’t, you can still take it and use it to plan for funeral expenses.
- Don’t Be Too Generous with Your Money
As a senior, you’re more vulnerable to being too generous with your money. This generosity can see your financial reserves quickly depleted.
Of course, there’s nothing wrong with giving money to your charities that’re close to your heart. However, you’ve to be careful to ensure a lot of money isn’t going out.
This mostly happens when a senior has adult children who aren’t financially independent. It’s only natural that you might want to keep supporting them for as long as you can, but this is dangerous in two ways.
One, you aren’t helping them learn to be financially independent if you’ve given them an open cheque. What will happen to them if you were to pass on today?
Two, if you don’t have money coming in, you’ve to realize that you’re dipping into a limited basket. Your expenses will increase as your health wanes, so you don’t want to leave yourself bare.
- Bank With a Senior-Friendly Bank
A bank is a bank, right? As long as it can store your money and dispense it when you need it, you might think that there’s nothing more to a bank.
The truth is banks aren’t created equal. They have different philosophies and approaches to banking, and some have services that are designed for specific population groups. Yes, there are banks that are best for seniors!
A senior-friendly bank offers a number of advantages over banks that don’t put seniors first. For instance, these banks offer special discounts to seniors because they want their nest egg to last longer. You’ll get perks like higher interest rates on savings accounts, great fraud protection, free checking accounts, and low interest on loans.
- Avoid Financial Fraud
In 2021, 10 percent of elderly people were victims of financial fraud.
It’s easy to see why seniors are prime targets for fraudsters. They know you have money somewhere and with a waning memory, you can quickly give out personal financial information.
Fraudulent activity can wipe out your life’s savings. If the wrong person has access to your bank account, for example, they can withdraw all your money. The only last of defense will be your bank, hoping that they’ll notice and put a freeze on the account.
There are several steps you can take to avoid being a victim of financial fraud. Choose a bank that can protect your money. Don’t give your financial details to anyone you don’t trust. Be extra vigilant when shopping online. If you lose your cards or mobile phone, report to your banks immediately.
- Don’t Gamble
Gambling or sports betting can be a nice pastime. As a senior, the one thing you have in abundance is time. So, it’s understandable if you find yourself using some of it to gamble.
Unfortunately, gambling can quickly spiral out of control. It’s highly addictive, which means you might not be able to stop it. It’s nice when you’re winning, but when the losses start to pile up, you could be staring at financial disaster.
As a general rule of thumb, don’t gamble. It’s not worth it. But if you have to or it’s a habit you’ve had for a long time, ensure you can keep it in check.
- Invest Wisely
There’s nothing stopping you from making an investment in your senior years. However, ensure it’s a sound investment with low risk. The last thing you want is to make an investment that’ll tie up your money as you wait for returns.
The stock market is an ideal investment market as always, but be sure to get professional help when choosing the stocks to invest in. You can also invest in real estate and even in digital assets, such as cryptocurrency.
The Best Financial Tips for Seniors
Being a senior comes with many challenges. You don’t want finances to be part of those challenges. With these financial tips, you now know what you can do to protect your money and even grow your wealth.
All the best and keep reading our blog for more financial advice and resources. The Finity Group is a comprehensive guide to Financial Planning For Physicians. Learn how to choose the right one and what to look out for.