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Managing finances can be difficult for anyone. When you are a senior on a fixed income, it becomes even more crucial to protect yourself from financial decline, scams, and people trying to manipulate you for money. According to the National Council on Aging, “Over 15 million older adults aged 65+ are economically insecure.” (1) It is important to look for ways to improve your financial stability and avoid problems that drain your bank account. You need to ensure that you can afford necessities such as food, housing, and safety devices for seniors.
A good way to learn to manage your finances is by being aware of the do's and don'ts of retirement planning. These financial tips for seniors can help you manage your money as well as help you protect your assets.
Financial Do’s for Seniors
There are many things you can do to help improve your financial security and ensure you have enough money to take care of yourself.
1. Create a Budget and Track Your Spending
One of the best ways to maintain your financial assets is by creating a monthly budget. Analyze what you can afford to spend per month by making a list of all your monthly bills and other regular expenses. Then figure out your total monthly income after taxes. Subtract your monthly spending from your income to figure out what remains. When making your budget, you should always save some money for emergencies. You may also want to investigate financial apps for seniors. They can help you keep track of your budget and assist you with other financial matters.
If you are aging in place (planning to remain in your home as you get older), you may want to include an emergency alert system in your budget. This is an essential gadget for seniors that can give you some security at all times by providing a quick and convenient way to contact someone whenever help is needed. Emergency response agents are standing by 24/7/365 to assist you.
2. Consult a Senior Financial Advisor
A senior financial advisor is trained in all matters of finance and offers the best financial help for seniors. They have worked with many seniors and have the experience to help you get your finances in order. They can teach you about personal finance programs for seniors, home finance, car finance, personal loans for seniors, and much more.
If you go out to consult a senior financial advisor, be sure to wear your mobile medical alert necklace. The built-in GPS will allow emergency response agents to quickly pinpoint your location if help is ever needed.
3. Automate Your Finances
If you are concerned about remembering to pay bills, consider automating your finances. This way, when your bills are due, the money will be taken directly out of your bank account. This helps you avoid late fees when you forget to pay your bills. Be sure to keep an eye on your bank account from time to time to avoid errors and scams. If you see any suspicious activity, contact your bank and the company associated with the charge.
4. Watch Your Taxable Income Level
When you understand and monitor your taxable income level, you can determine how you will be taxed so you can make decisions that can save you money. You may have multiple sources of income whether it be a part-time job, a pension, a 401k, or social security. Your income can affect your tax bracket and determine how much you will have to pay. Therefore, by paying attention to your income and what tax bracket you will fall into, you can limit what you take out to remain in a lower tax bracket. Understanding and monitoring your income level can get tricky. Therefore, it is best to consult a senior financial advisor for the best senior financial tips.
5. Monitor Your Bank Account and Credit
By monitoring your bank account, you can catch suspicious transactions and help prevent unnecessary financial losses. If you catch any suspicious activity, be sure to call your bank to report the fraudulent transaction right away.
Monitoring credit is also important for seniors. Good credit provides the ability to make large purchases when needed. Be sure to safeguard personal information like your credit card number, social security, PINs, and passwords. This will help you avoid identity theft.
6. Set Up a Power of Attorney
According to Consumer Financial Protective Bureau, “A power of attorney is a legal document that allows someone else to act on your behalf.” (2) According to AARP, “ A little over half of adults have a power of attorney in place.” (3) If you experience memory loss, cognitive decline, or another condition that prevents you from making decisions on your own, you can set up a Power of Attorney to transfer the ability to make financial decisions for you to someone else. Make sure that this is someone you trust who will honor your wishes and act on your behalf.
7. Make a Will
A will outlines who will receive your assets when you pass away. If you don’t have one, state laws will determine how your assets are divided. If you want certain assets to go to certain family members, friends, or neighbors, be sure to set up a will with these details. You can visit your lawyer to create a will or do it yourself. However, if you do it yourself you will have to have it signed by two witnesses who do not benefit from the will. Each state also has its own laws and regulations about wills so be sure you are following the instructions to create a will in your state.
8. Invest in Your Safety
As you age in place, there are many aspects that you should invest in to keep yourself safe. This may include using home fall prevention interventions such as installing grab bars and railings, repairing any damage to their home that could pose as a tripping hazard, or investing in tools and technology that can help you navigate your environment more safely. This may include chair lifts for stairs, adjustable height beds, installing ramps, or using senior life-saving alert systems.
A medical alert device for seniors is an essential safety tool that can help you quickly and conveniently contact someone for immediate help wherever and whenever you may need it, 24/7/365. There is no need to dial a phone number, search through contacts, or hope that your friend or family member will be available to answer the phone. When you press the alarm button on your device, an emergency response agent will come on the line, ask you questions, and then contact whoever you choose or need for help. They will also stay on the line with until help arrives.
An Alert1 emergency response solution is an essential tool for seniors. These pendants, bracelets, and watches mean you can instantly contact someone for help no matter what time of day or night it is. There are currently six options to choose from:
· In-Home Medical Alert System for Seniors – This system comes with a home-base and medical alert necklace or bracelet with a 600-foot range. This system does not require a landline, is showerproof, and has a 24-hour backup battery for power outages. You can press your button as many times as you need and talk to an emergency alert agent for as long as you want. The certified emergency response agent will stay on the line with you until help arrives.
· In-Home Fall Detection Device for Elderly – The in-home senior fall prevention alarm is almost the same as the in-home emergency alert system, however, it also offers a built-in fall detection sensor. When the sensor registers a fall, it will automatically contact an emergency response agent. Then you can talk to them through your base unit. You may also want to consider a voice extender if you have a large home and are concerned about the agent being able to hear you. The fall detection option is a useful feature for those who have any conditions that may prevent them from pressing a button such as dementia or an injury.
· On-the-Go Emergency Button Alarm – The Alert1 mobile medical alert system for seniors is the best medical alert device for seniors who like to travel. It provides access to help everywhere you go in all 50 US states.
· On-the-Go with Fall Prevention Alarm for Seniors – The on-the-go senior fall alert offers both built-in GPS and fall detection. This can help ensure that you can get help wherever you are and whenever you need it. It also includes the added protection of not having to press a button to contact someone for help if you fall. However, the medical alert pendant for the elderly still includes a button in case you need it for emergencies.
· All-in-One Medical Alert Technology – You can also purchase a package that includes both the in-home and mobile emergency button alarm with fall detection. This package can provide you with the best overall protection. You can use the in-home personal alarm button while you’re home and the on-the-go button when you go out.
· Medical Alert Wrist Watch – The emergency medical alert wrist watch is Alert1’s most sporty medical alert system. This emergency response solution looks exactly like a normal wrist watch and includes a weather app and pedometer. These are useful features that can help you appropriately prepare for the day and meet your fitness goals.
Financial Don’ts
There are also a variety of actions and behaviors you will want to avoid to protect yourself from financial decline.
1. Retire Too Early
If you retire too early, your social security benefits will be smaller, your retirement savings will have to last longer, and you may need to find health insurance on your own. All three of these aspects can make your finances tighter. If you want to retain more financial security, retire at the appropriate time. According to survey from Senior Living,
· 29% of workers are very confident they will have the resources for a comfortable retirement
· 42% are somewhat confident
· 19% are not too confident (4)
You may also want to consider retiring in stages. Instead of transitioning to full retirement right away, consider getting a part-time job so that you have some additional income to support yourself.
2. Fall for Scams
Unfortunately, seniors are often the target of scammers. It is important to understand how to protect yourself both online and in the real world. Some good rules of thumb to avoid scams include:
· Avoiding giving out personal information.
· Avoid deals that seem too good to be true.
· Don’t let yourself be bullied or manipulated into giving someone money.
· Avoid making purchases from unfamiliar brands or companies.
· Avoid clicking on suspicious website links.
· Use caution when doing business with anyone you have not met in person.
By using these tips to avoid scams, you can help protect your financial assets.
3. Keep Large Amounts of Cash at Home
If you keep large amounts of cash at home, you may risk losing it due to theft or fires. Your money also can’t earn interest and can decrease in value due to inflation. While it is convenient to have some cash at home, you should put most of your money in a bank.
4. Take Your Social Security Income Too Early or Too Late
The timing at which you take your Social Security benefits can increase or reduce your benefits. According to Morning Star, “Taking Social Security benefits before full retirement age can reduce your monthly benefit by up to 30%. Delaying benefits past your full retirement age can increase your benefits by 8% a year through age 70.” (5) While you may have good reasons to take your Social Security benefits early, this is certainly a factor to consider.
5. Lock into Expensive Financial Commitments
Locking into expensive financial commitments such as car loans, home mortgages, school tuition, and major home furnishing purchases can significantly decrease your funds for retirement. Whether these buys are for yourself or a loved one, it is best to avoid large financial commitments as you age. Some large investments may be necessary such as health insurance, HVAC systems, or certain home renovations. However, it is important to know what you can afford and be cautious about spending your money.
An Alert1 medical alert device for seniors is an investment you will want to make as it can provide you with peace of mind and security and systems start at less than $20 for a full month of protection. If you fall or experience any type of emergency, you will have an instant and easy way to contact an emergency response agent. The agent will assess the situation to get you the help you need. If you are unable to talk to the agent for any reason, your button alert device will still get you help.
6. Give Too Much Financial Support to Children and Grandchildren
It often feels nice to support your children and grandchildren. However, if you continually buy them expensive things, it can drain your retirement funding. It may seem like you have plenty to give, and you may enjoy making your loved ones happy, but it is important to remember how long those funds must last. You can still help your loved ones and give them gifts; however, it is important to pay attention to the frequency and size of this spending.
7. Stop Learning about Finances
There are seemingly endless things to learn when it comes to managing your finances. The more you learn, the more equipped you will be to make important decisions. It is also important to start learning sooner rather than later. This will help you plan a financially successful retirement.
1 National Council on Aging Staff. Mar. 2021. Economic Security for Advocates. National Council on Aging. Get the Facts on Economic Security for Seniors.
2 Consumer Financial Protection Bureau staff. Aug. 2016. Bank Accounts and Services. Consumer Financial Protection Bureau. What Is A Power of Attorney (POA)?.
3 Walls, Barbranda Lumpkins. Feb. 2017. Investing. AARP. Haven’t Done a Will Yet?
4 Senior Living team. Aug. 2021. Research. Senior Living. 2021 Retirement Statistics.
5 Rowling, Sheryl. Aug. 2021. Investing Specialists. Morning Star. 8 Financial Do’s and Don’ts for the 7-Figure Retirement.