The Best and Most Practical Financial Advice for Seniors
It’s hard work to reach retirement, and you want to spend that time free from financial worries. In order to live comfortably, it’s necessary to understand how you can make the most of every dollar. Here is important information about smart money management for seniors.
Saving on expenses is important, even if it’s just a little here and there. Thankfully, there are many discounts available to seniors, and you should take advantage of them every chance you get. Look for discount clubs as from AARP, veteran discounts, senior discounts, and explore shopping opportunities at wholesale clubs and thrift shops.
Another suggestion is to make lifestyle changes. You can sell a vehicle you don’t need anymore, or you can shop for less-expensive insurance or healthcare coverage to avoid paying too much out-of-pocket. Sometimes, more drastic measures can save a bundle while also improving your quality of life, such as getting a roommate or downsizing to a smaller, less costly and more manageable home. Another idea is to call creditors and bargain for lowered interest rates. If you have a clean payment record, you can often get your rate reduced.
Income and Expenses
Do you have a budget in place? Creating a budget is an often overlooked practice, and it can help you understand where your money is going. A budget is more than just balancing your checkbook. You should first calculate all your sources of income. Then, note all your monthly expenses, starting with the ones that are the same all the time, such as a mortgage or car payment. Those are called “fixed” expenses. You also have “variable” expenses, and those items include things that are more flexible, such as groceries, clothing, and entertainment. Subtract all your expenses from your income. You want a zero balance; if you have money left over, you can put it into savings. If you are left with a negative number, you need to either improve your income, which is difficult if you’re already retired, or you need to reduce spending. The easiest place to cut spending is in your variable expenses.
Consolidate Plans and Information
If you have multiple retirement plans, Ally.com suggests consolidating into a single provider. That makes it easier to track your investments and calculate minimum mandatory withdrawals. You should also compile your financial data into a single place. Pool your paperwork, account information, passwords, safe deposit key, and any other related data into a safe place, and let a trustworthy friend or family member know where you stashed it.
Dates and Social Security
Are you already withdrawing Social Security retirement benefits? If you are considering retirement and are trying to decide on dates and income, you can use a retirement calculator to help tally your numbers. Ideally, you should wait as long as possible before collecting Social Security, and the best age to maximize your retirement benefit is 70. You should not wait until beyond age 70, as the benefit will not increase after that point. If you work during retirement, there will be a penalty for early withdrawal, so definitely postpone applying for Social Security while working. If you have a health condition and you do not expect to live beyond age 80, it does make sense to begin collecting your benefit earlier.
Scams and Scoundrels
There is a segment of the population that sees seniors as easy targets. NerdWallet recommends staying alert to people using double-talk, using excessive pressure, or presenting information that feels confusing. You can always say you want to talk things over with your financial advisor or your children before committing to anything. If someone is exceedingly friendly, for instance offering you lunch or calling repeatedly, consider it a red flag. Also, avoid any situations without paperwork. Even in the electronic age, you should be able to receive a paper trail. And never give account information or passwords over the phone or via email.
When you retire, you want to do so with as few worries as possible. Adjust your finances as needed to ensure you have solid ground. You’ll be more comfortable facing your future armed with practical measures in place.
Our guest blog is courtesy of elderfreedom.net
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