Financial planning as you age isn’t a one-and-done situation. Sustainable financial planning is an ongoing process that is flexible and adapts to your changing goals and situation. For many, the idea of planning is stressful, but it doesn’t need to be. Once you get into the habit of financial planning, your anxiety about money will likely decrease. We have some tips to consider, but always seek the advice of financial and estate planning professionals before making any significant changes. The goal is long-term financial security and the freedom to enjoy life!
Seek Professional Advice
It is never too late to seek professional advice to manage your finances. A financial advisor specializes in retirement planning and investments. An estate planning attorney ensures that your estate is protected and you have designated heirs and power of attorney for your healthcare and estate. Any costs associated with paying these professionals will likely save you money, time, and stress in the long run.
The Importance of Budgeting
Budgeting is the process of tracking income and expenses so you can adjust your spending to meet your healthcare, housing, and leisure pursuits needs. You may need to change your expenditures if you are on a fixed income, but it can be fun to see how much money you can save without it being a hardship. Consider paying off high-interest debts like credit cards to reduce financial strain and closely examine what you spend money on and where you can cut back.
Healthcare Cost Planning
Your health is unlikely to remain the same over time, so it is important to plan for additional care costs if needed. For example, you may require in-home care after a surgery or illness. In-home care is private pay unless you have long-term care insurance and meet the criteria for benefits. Otherwise, you may rely on investments or savings for these potential costs. Also, by reviewing your Medicare and prescription drug plan yearly, you can assess whether it continues to meet your healthcare needs and if there are comparable lower-cost plans that may save you money. Some seniors rely on GoodRx or similar drug discount programs when costs are lower than going through insurance. Remember, Medicare does not pay for independent or assisted living.
Retirement Income Considerations
In working with a financial advisor, they can advise on the best time to begin withdrawing funds to minimize tax consequences and ensure the longevity of savings. To optimize your social security benefit, you may delay benefits, but talk with your financial advisor about your overall financial situation and health to make the best decision.
Estate Planning
Everyone should do estate planning to protect assets, plan for the future, and assign responsibilities to family members. You may choose to use an estate planning or elder law attorney who can ensure you use state-specific legal documents. Estate planning involves:
- Writing a Will. A will is crucial because it describes how you would like your property and assets to be distributed after your death. A will relieves your heirs of making stressful decisions after your death.
- Financial and Healthcare Power of Attorney. You should designate a trusted person to make healthcare and financial decisions if you cannot do so. Many older adults choose their spouse for this role, but you may consider an adult child in a backup position.
- Living Will. Although not part of your overall financial picture, a living will is a crucial document to have in place. It details your medical wishes if you aren’t able to give consent.
Stay Informed
Financial fraud is a serious and persistent problem. In 2023, online scams targeting seniors caused $3.4 billion in losses. Anyone can fall victim to fraud, but seniors are disproportionately affected. Educate yourself about typical scams so you can be prepared.
Senior Discounts
Senior discounts are everywhere. You can take advantage of discounts on travel, entertainment, shopping, insurance rates, and restaurants. AARP members also enjoy additional discounts. For example, as an AARP member, you may save on your car insurance if you take their driver safety class. These small savings add up over time and are well worth taking advantage of.
Financial Stability for Well-Being
Financial stress can have a significant impact on your health. Worrying about finances can cause insomnia, depression, anxiety, and worsening of medical conditions. Take control by following these tips:
- Focus on a healthy lifestyle. People underestimate the importance of staying healthy as a financial strategy.
- Assess your financial circumstances and meet with a financial advisor to devise a plan to improve and stabilize your situation.
- Talk with your family about any concerns you may have about future care costs. You may be reluctant to ask for financial help, but discussing the situation can give you insight into possible solutions.
- Resist any urge to delay acting. When you have a plan, you will feel less stress. Even if you feel confident in your financial situation, revisit your budget yearly. This is a time to enjoy your life and improve your well-being by taking charge of your finances!
For more information about our 55+ Independent Living Communities, please contact us at The Chateau or Park Place.