A 2016 article in Fortune stated that nearly two-thirds of all Americans could not pass a basic financial literacy test, which covered interest calculations, bond prices, debt, and other financial concepts. However, you would think that after a lifetime of making money, senior citizens would be an exception to that. Unfortunately, many of them still need lots of guidance when it comes to managing the money they’ve worked so hard to save. Plus, as they age, memory problems can affect their financial skills. Some seniors aren’t even sure of their own net worth or know the value of their homes. And many seniors can be vulnerable to financial scams and identity theft.
As a senior citizen, you have so much at stake with your finances — retirement funds, savings, medical expenses, a home that’s most likely paid for, and so much more — that it makes sense for you to be as financially literate as others just starting out in life, maybe even more so. With some planning and awareness, you can learn to manage your money and keep your finances in check.
Start with the Home
At this point in your life, you probably own your home. As such, it’s an excellent idea for you to determine exactly what your home is worth. Check out other home prices in your area to see how yours matches up. You can easily research online or contact a realtor to determine your home’s value. Once you have an idea of your home’s worth and what the going rate is in your market, you have a lot to work with.
If you feel you have too much house at this point in your life and your mortgage (if you’re still paying on it) or even just monthly utility bills are putting a strain on your budget, you could sell it and downsize to a smaller one. Not only are you likely to make a profit from the equity in your home, but new mortgage and utility payments might be considerably less, plus you won’t have as much house to clean and maintain.
Manage Your Retirement Funds and Savings
It’s never a good idea to stop managing your retirement funds and savings just because you are retired. In fact, you need to keep assessing your situation. You will probably have unexpected out-of-pocket medical expenses, encounter tax issues when and if you withdraw funds, and need to provide a legacy for your family. You will, therefore, need to carefully watch what your money is doing. One of the best things you can do is consult a financial advisor who specializes in senior citizen finances or an elder law attorney. Both can provide insight into your financial situation now and what can be provided for your family. And while it sounds harsh, now is also a good time to consider burial insurance to help offset any expenses that could burden your estate when you die. You don’t want all of your hard-earned savings to get eaten up by medical bills and funeral expenses.
Look for Extra Ways to Save
The best way to stay in the black is to be mindful about how you spend your money. This means opting for road trips instead of expensive flights. Eating out less and buying fewer nonessentials. Look for senior discounts at the grocery store or movies, and check on ways to save on your healthcare coverage. Every cent adds up and can contribute to your ability to age in place down the road or to live comfortably if you have to downsize further.
Be Mindful of Scams
As a senior, you can be vulnerable to scams from those who want to take your money. These can range from telemarketing phone calls that do nothing but get your personal information to home improvement fraud. You’ve worked hard for your money and you don’t want some scam artist to take it away from you. Remember to never give out credit card or Social Security information over the phone to anyone you don’t already have a relationship with. And to prevent home improvement scams, get the business card of anyone offering to fix anything and check them out yourself. Ask the provider for a list of references. If you’re still unsure, contact your financial advisor or your elder law attorney, as well as your area’s Better Business Bureau.
All of your financial resources, including retirement funds and savings and the value of your home, can work for you as you age. Because they work for you, that makes you the boss. And a good boss knows how to manage.
Photo Credit: Pexels.com