While many retirees start their golden years with stable finances, this may not be the case as the years pass by. People live longer because of advances in medical care, and their retirement finances might not be sufficient to last that long. Many seniors come face-to-face with some stark financial realities that leave them needing to make difficult choices about their futures.
Here are some of the financial issues that seniors face and advice for dealing with them:
Rising cost of living
While Social Security benefits might be inflation-adjusted, the prices of many basic commodities seem to rise by more than the annual increase. Shortages cause prices to rise, and seniors soon see their grocery bills skyrocketing.
What seemed like an accurate budget for their retirement when it started is no longer enough to cover their expenses. Utility prices, the cost of gas, and insurance premiums rise, and it is difficult to cover these costs.
Seniors must work on a realistic budget, setting out their income and expenses each month. After that, they should list their actual expenditures to ensure that they do not exceed the amount allocated on the budget.
Spending should first focus on necessities, such as housing, utilities, and food, and then on discretionary expenses that cover extras. A vital component of the budget is allocating an amount to save for emergencies.
Medical care
Although seniors are entitled to Medicare from the age of 65, the benefits do not cover all expenses. This leaves older people with bills and copayments that are often beyond their financial means. Russell Noga from Medisupps recommends looking at Medicare Advantage Plans 2021 options to help cover these costs. There is a variety of Advantage Plans for seniors to examine, and having an advisor assist them ensures they make the right choice.
Medicare Advantage Plans cover expenses that Original Medicare does not. This includes prescriptions. Hospitalization stays and copayments on all aspects of medical care no longer need to be a cause of concern for seniors. Advantage Plans are available at reasonable, affordable premiums and save retirees a lot of money.
Financial management challenges
Financial decline among seniors includes signs that they start struggling to manage their finances. They might become confused or hesitant about making purchases. They might also become forgetful and not pay bills on time. Many seniors feel anxious about the way finances have moved online as they are unfamiliar with the technology.
Family members should be vigilant about their senior relatives’ financial management abilities. This is a delicate subject, as older people do not want to be treated like irresponsible children.
At the same time, you cannot afford to watch them make costly financial errors. Help older families set up electronic bill payments to ensure that accounts are paid automatically, and the person’s credit score remains unaffected. Have an honest conversation about financial management and offer help diplomatically without insisting on full control.
Scammers
Fraudsters prey on the elderly, and many of them are robbed of their life savings because a con artist takes advantage of them. Seniors tend to believe that people are sincere and would not intentionally cause them harm. Unfortunately, scammers view them as soft targets.
Explain how scams work to older families and tell them about the warning signs of potential fraud. Set the tone of the conversation such that these relatives will approach you if they are unsure because you will offer sound advice.
Tell elderly relatives never to share passwords and other confidential information with anyone on the phone without verifying who they are and where they are phoning from.