Everyone should make careful considerations regarding finances. But for seniors, careful financial considerations are essential in ensuring a comfortable retirement.
As we age, we lose our ability to work as hard as in our golden period. Furthermore, health issues can aggravate the limited capacity. So, careful planning to ease the financial burden in those times is an absolute essentiality, furthermore a poor decision at a later stage in life can result in disastrous consequences. So, we have a list of financial considerations to keep in mind if you are a senior.
Setting financial goals is the very start of having solid finances. For seniors, they have to consider things that they might require in the future. Physical assistance and healthcare are some of the things that they have to consider [i]. Having goals like whether they would like to stay at home or move to a care facility once they are old are just somethings they have to consider and plan accordingly.
A lot of factors contribute to the retirement income of a senior. Whether they get funds from retirement savings plan or a personal saving plan, it is important to keep the ball rolling by further creating earning options to have a growing financial structure even post retirement. These can be achieved by investing in laddered bongs or laddered certificates of deposits [ii]. Furthermore, investing in real-estate and stock exchange is a great option to get benefits on your returns.
Planning for your retirement
We have all heard stories of people who had to work post retirement. The best way to avoid this is to thoroughly plan your expenses and plan to achieve that target number. For starters, check your current spending. Just pick up your expenses from the last six months and observe what and where you spend on major categories [iii] (Groceries, utilities, transport et cetera). Make assumptions on how these spending patterns will look like in the future, increased healthcare budget, kids’ education in the future or any other additions that might be lurking ahead. Furthermore, it is important to keep in mind the constant rate of inflammation which you have to consider.
Managing cash flows and budget
Learning to manage cash flows and maintaining budget goes a long way in managing your over-all finances. While it may seem like a daunting task at first, using a simple dedicated software, excel or using paper ledgers can make management of finance a breeze [iv]. Once you have decided on the tool, it is only a matter of setting a time-frame, projecting cash-flows and calculating the ending balance to gain an understanding of what your retirement savings might look like in the future. Once, you get the right tools, you can plan what you need. If this seems a taxing activity, you can always hire a professional to manage your finances.
Beware of scams and abuse
Financial scams are a major occurrence. Miscreants are always in search of vulnerable targets to con and exploit. Seniors need to be extra vigilant as scammers are aware of their vulnerability. In order to avoid any inconvenience, it is necessary to avoid buying anything online, or through email. They should also avoid giving any information over the phone or email regarding their identity or sensitive information as Social Security number or credit card details. Being careful will not only save from financial setback but other possible legal complications.
Planning for the end
Perhaps the most unpleasant thought is to think of the inevitable demise. However, it is important to take into this consideration, especially after understanding that there might be people (spouse, children and loved ones) who might be dependent. Getting life insurance will ensure that they are looked after. Other considerations are to clearly write a will in order to avoid any confusions later on. If you have any medical condition which might affect your mind and ability to make decisions about your finances or health, then it is a good idea to give someone you can trust the power of attorney to make decisions about your finances and health.
These things might be uncomfortable, but working them out is the only way to have a comfortable life after your retirement.
[i] “Financial planning tips for seniors/Webpage,” www.financiscanministries.org, Corporate, Published 28 Aug 2020, https://www.franciscanministries.org/blog/financial-planning-tips-for-seniors/”
[ii] “4 Sources of income for your retirement/Webpage,” www.investopedia.com, Lisa Smith, Published on 19 Jan 2020, https://www.investopedia.com/articles/retirement/08/retirement-income-stream.asp”
[iii] “10 essential factors of a retirement planning checklist/Webpage, www.goodfinancialclients.com, Jeff Rose, Published 26 Feb 2020, https://www.goodfinancialcents.com/retirement-planning-checklist/”
[iv] “7 steps to create your cash flow budget/Webpage, www.liquidapitalcorp.com, Mark Glucki, Published on 07 Nov 2020, https://liquidcapitalcorp.com/blog/cash-flow-2/7-steps-to-create-your-cash-flow-budget/