Guest Blog by Jim Vogel of ElderAction.org
Managing your money in retirement. Worried about how you are going to manage your money in retirement? Don’t be – keeping a grasp on your finances as a senior is not as intimidating as all those percentages and bits of financial jargon make it seem. Simple money management techniques combined with some common sense and expert tips can make it all surprisingly straightforward.
Keep A Budget
Managing your money in retirement includes staying on a budget. Chances are you are going to have to live on less money when you retire, and this can take some getting used to. The single best thing you can do to manage your money effectively in retirement is to develop a budget and stick to it. This will keep you from burning through your nest egg and keep you comfortable for longer. The Balance has a detailed, step-by-step guide to setting up a retirement budget that will help even the most financially confused senior get it right to help in managing your money in retirement. You should incorporate some cost-saving measures, such as using available senior discounts, cutting transportation costs, and taking advantage of services from public libraries and community centers.
Set Aside Money For Your Health
Ideally, you should have already started planning your finances for your health costs and long-term care by the time you reach retirement age. According to CNBC, over half of adults over 65 will need long-term care at some point in the future, and that’s excluding any other potential accidents, emergencies or surgeries you may have to pay for.
If this is not something you have considered, now is the time to do it. You have a few options. You can either start saving for health care costs (which can be difficult if you are living on a pension), set aside an existing portion of your savings (possibly in a health savings account), or enroll in Medicare Advantage. This is a good option for seniors since it includes the benefits of Medicare Parts A and B as well as useful extras like dental, vision care, prescription drugs and health and wellness programs.
Be Smart With Social Security
Social Security benefits can be a confusing area for some people, who rush to get their money out as they approach retirement. However, waiting until full retirement age is the best way to get the most out of those payments, so it (literally) pays to be patient. This easy-to-understand guide by NerdWallet explains the ins and outs of making the most out of your Social Security, and the website overall is a great place to go to boost your financial literacy.
Protect Yourself From Fraud
Although you may not want to admit it, seniors are particularly vulnerable to scams and other forms of fraud. According to the Association of Certified Fraud Examiners, fraudsters prey on seniors by taking advantage of loneliness, willingness to listen and trust in others.
Thus, the best way for seniors to protect themselves from scams is to never trust strangers, especially if they try to scare you or rush you into action. Never share your bank details with anyone over the phone, and only use secure websites for online payments. Check your bank account regularly to spot any unusual activity, and if you get pestering phone calls, ask to be removed from whatever list your number is on.
Consider Loved Ones
Think about ways you can protect the finances of your loved ones in the future. One option is taking out a final expense insurance policy. This type of insurance covers funeral expenses along with medical bills and credit card debt. By financially planning for your funeral ahead of time, you can provide financial relief to your loved ones. Money.com has put a list of the 12 Best Insurance Companies to use as a reference while choosing the right insurance for your needs.
Being financially savvy during your retirement is not as complicated as many people fear it to be. It is really no different than managing your money responsibly at any other point in your life, except that your income may be lower and your priorities will be different. Simply remaining on top of your budget, expenses and savings can make a world of difference, while researching other forms of financial literacy can give you the extra edge you need to make the most out of your retirement. We hope you found these tips helpful in managing your money in retirement.
Photo via Pexels.
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