As an older adult who wishes to age in place and live an independent lifestyle, financial planning may seem something you only need to worry about from your younger days. However, as a senior, money may matter much more to your well-being since your needs frequently change and new factors can affect your spending and saving capacity at this stage of life.
For this reason, it’s a good idea to step back and ensure your financial path genuinely suits your interests. Some of the most helpful financial planning advice has been compiled for you to assist you in making your aging-in-place process financially safe.
Create A Monthly Budget And Track It
Some elders, like many younger people, need more fiscal awareness and see the necessity to monitor their expenditures. However, many must spend more money and make their bill payments on time.
If you lack the drive to maintain a budget, know that it can be very beneficial, especially if you’ve recently retired and need to get a handle on costs. Track everything and be realistic with your suggested budget; the little things soon add up.
The 70/30 rule is a widely used budgeting technique that can assist in directing your spending choices. The National Council on Aging suggests developing a budget calendar and learning about it.
According to the 70/30 rule, you should save 30 percent of your income and live on no more than 70 percent of it.
Make Sure The Power of Attorney Are All In Place
To deal with circumstances where they cannot make financial decisions for themselves, every senior should obtain a durable financial power of attorney. This legal instrument designates a reliable individual to handle financial matters on your behalf.
A family member providing care may also help financial management for a loved one who is still capable. When you want someone to deal with your finances on your behalf, a power of attorney may be helpful.
Streamline Income and Bills
Although switching from paper to electronic banking may seem intimidating, automating income sources and bill debits simplify managing your finances.
Debts and deposits can be scheduled to happen on a particular day of the month to maintain the account in balance and automate payments to avoid past-due bills. Direct deposits and debits can be set up with the assistance of banks and revenue sources like Social Security.
Shared access to accounts also enables you to delegate oversight of account activities, budget monitoring, and fraud detection to someone else, such as the person designated in your financial POA. Additionally, it offers immediate account feedback rather than relying on a monthly statement.
Beware of Financial Scams
Seniors are the target of financial scams at an alarming rate. Set up an account to alert you if there are any significant withdrawals by contacting your bank. To ensure there are two sets of eyes looking out for abnormalities, give the person listed in your financial POA access to the account.
It’s also crucial to realize that shady calls or emails asking for money or personal information should NEVER receive a response. If you believe an account has been compromised, get in touch with the bank or credit card provider immediately.
Take Advantage Of Government Programs
Many seniors aging in place have owned their houses for years, thanks to mortgage payments. If you meet the conditions, there can be significant savings as property tax assessments grow in many places.
For instance, New York offers the School Tax Relief (STAR) program to assist older homeowners in lowering their property taxes.
For individuals 65 and older, many states provide a senior property tax exemption, which can result in sizable savings. If you want to find out if you qualify for equivalent regional, state, or federal aid, go to Benefits.gov or BenefitsCheckUp.
Balance Utility Bills
Maintaining a consistent monthly payment schedule while creating a balanced budget makes it simpler to adhere to over time.
Most utility providers offer payment plans that charge the same monthly amount, with the average cost spread over the year. Your energy cost will be within your predetermined budget because it is consistent and doesn’t soar throughout the hot and cold seasons.
Review Insurance Plans And Premiums
Insurance requirements may alter as seniors age in place, so how you pay for policies should make financial sense. With the provider, review current policies to ensure they are still pertinent and up to date.
Generally, premium payments can be made monthly, quarterly, or semi-annually. Depending on your financial condition, payments in installments might be the best option; but if you can pay in whole annually, some insurance providers will give you a discount.
Explore Senior Discounts
Senior discounts may be insignificant, and companies frequently don’t advertise them. However, requesting them and utilizing discounts adds up over time. Take the initiative to look for them in eateries, shops, and other establishments.
You can find listings of local senior discounts online. Once you’ve visited these establishments a few times, looking for these discounts will come naturally.
Here are some of the best senior discounts you should look out for, according to Forbes Health:
- Retail Senior Discounts
- Grocery Senior Discounts
- Restaurant Senior Discounts
- Leisure Activity Senior Discounts
- Cruises Senior Discounts
- Hotel and Rental Car Senior Discounts
- Air, Bus, and Rail Senior Discounts
- Internet Service and Communications Senior Discounts
- Major Life Expenses Senior Discounts
Look For Telecommunications Deals
Everyone can struggle to manage their cell phone, cable, internet, home security services, and the packages provided by telecommunications providers. Check your plans to make sure the cost and service quality are reasonable. Do you, for instance, watch all cable TV channels or anything close to the number of cellular minutes available? Compare your alternatives and enquire about package offers and elder discounts from service providers.
Financial planning is an important aspect of retirement and a way of cutting costs of aging, and it should begin when you are still young and able to work. You will probably read many tips regarding when to retire and how to manage your income when making retirement and savings plans. But remember that financial planning is not a one size fits all process.
You can create a plan specific to your requirements and financial situation by consulting with a financial planner or retirement counselor. Start retirement planning as soon as possible, and remember to rebalance your financial portfolio whenever necessary.