Safeguarding Your Retirement: The Importance of Financial Awareness for Seniors
Right at Home Sarasota
For more information about the author, click to view their website: Right at Home
Sep 07, 2023
Email US
Click to Email Us
Baggage comes with getting older, including the need to organize personal finances. Money concerns and financial considerations do not lessen as we age. Indeed, they tend to get more complicated. Why? As retirement nears, most seniors must navigate a pair of complex federal programs—Social Security and Medicare—that are meant to cushion our later years. However, the many rules, options and penalties associated with each require careful planning and decision-making.
For most seniors, the challenge is finding the right mix of benefits, liquid assets and income streams that allows them to live comfortably from day to day while still having enough reserves to meet major health and housing expenditures that arise.
Money worries vary widely among older folks depending on how many or little assets they accumulate and how wisely they choose to take their distributions. These tips may help you prioritize your steps.
1. Plan and Prepare
Just as guidance from professional financial planners and advisers throughout one’s working life is important, it is vital in retirement as well. Studies show that many seniors possess low levels of financial literacy. It is essential for older adults to build their financial management skills, including knowing when and how to claim benefits and what asset portfolio makes sense for them. You can attain these skills and knowledge through your employer’s human resources department, workshops, seminars, online resources, family and friends.
Experts advise adults to start preparing for their golden years long before retirement age. Responding to life-changing circumstances, such as marital status or health, may require one to adjust their financials. While planning can help make sound decisions, some things require education and literacy in the moment they occur. Examples of these “just-in-time” decisions include when to claim Social Security, enroll in Medicare, or downsize a home.
2. Know the Ins and Outs of Social Security
Seniors are able to start claiming their Social Security benefits between ages 62 and 70. The difference between the expected benefit at each age is significant. Deciding the optimal time to collect it is imperative since it is a substantial source of retirement income for nearly 9 out of 10 people ages 65 and older.
For adults with shorter life expectancies or immediate needs, receiving Social Security before full retirement age could be beneficial. Yet, studies show many claimants could benefit by waiting to collect later. Because Social Security provides guaranteed, inflation-adjusted income for life, it provides unique protections against longevity risk, inflation, and poverty in later ages, according to an aging.senate.gov summary.
Surviving spouses receive either their own benefit or their spouse’s benefit, whichever is higher. For married couples, that is why it is vital to know when to claim benefits for the higher earner in the household. People can work and claim benefits, work and delay benefits, or stop working and delay benefits. Each path has its own considerations and effects in terms of benefit payout.
Other sources of income, such as savings, retirement accounts, and pensions, are other key assets that should be considered when deciding to collect Social Security.
3. Understand the Medicare Musts
Medicare’s guaranteed health coverage is more critical than ever due to the escalation of health care and health insurance costs. Seniors enroll in the program through the Social Security Administration. Once a senior starts receiving Social Security benefits, they are automatically enrolled in Medicare Parts A and B. Folks not receiving Social Security must apply for Part A and decide whether to apply for Part B. Seniors must also choose how to receive coverage through enrollment in a Medicare Advantage plan or other plans.
Those not automatically enrolled in Medicare must navigate enrollment periods to avoid penalties. Seniors need to be wary of scammers targeting them during their initial sign-up and open enrollment period.
4. Research Before Annuitizing
Seniors with a 401(k) may have the option to purchase an annuity. An annuity is an investment option that can provide a guaranteed income for an individual or their spouse throughout their retirement. Annuities are purchased for a set period and pay out a specific amount in retirement based on the investment strategy and amount invested. The decision to annuitize is complex and carries budgeting considerations and transaction costs. Knowing longevity, inflation and market risks is important when deciding to annuitize a 401(k).
You can learn more about the risks and rewards of rolling your 401(k) into an annuity from Kiplinger Personal Finance.
5. Know What Else You Should Consider
- Experts recommend maintaining a level of liquidity (easily accessed money) in order to pay for any large or irregular expenses associated with medical and long-term care needs.
- The decision to downsize or move into alternative housing is often driven by financial, health, or other personal reasons, such as losing a spouse or partner. Thus, aging in place is not always an option for, or desired by, all older adults. By working with your financial adviser and talking with your family, you can better understand what options may be available to you as you age. Right at Home offers a FREE RightConversations Guide to help families as they have a conversation about aging.
- Research any senior savings programs you may be eligible for by joining AARP or other organizations; file for a homestead exemption; and ask vendors you frequent if they offer senior discounts (some stores and service providers do). Check with your Area Agency on Aging for meal programs or other services you may qualify for.
- Financial professionals like accountants, advisers and planners can look at your various assets and resources to assist in decision-making and ensure you are aware of your options. AARP offers a free online resource to help as you consider whether a financial adviser can meet your needs.
- The Money Smart for Older Adults Program raises awareness on preventing fraud, scams, and other elder financial abuse. It is a free program offered by the Federal Deposit Insurance Corp. and the Consumer Financial Protection Bureau. Topics include investment fraud, avoiding telephone and internet scams, and planning for unexpected life events.
- Bottom Line: Do not leave your financial future to chance. Having diversified assets and income streams that maximize everything you have earned and are entitled to receive should be the goal. Just remember that in retirement, every little bit helps, especially when your living situation changes. That is when you want the security of a personal financial safety net. That protection only comes with knowledge and action.
These tips do not constitute financial advice or recommendations for your financial decisions. Consult a knowledgeable and experienced financial adviser suitable for your situation.
Leo Adam Biga is a veteran freelance journalist and author who writes stories about people, their passions and their magnificent obsessions. The Omaha native and University of Nebraska at Omaha graduate is the author of “Alexander Payne: His Journey in Film.” Follow his work at https://www.facebook.com/LeoAdamBiga.
- To view the original version of this article visit www.rightathome.net/blog/financial-awareness-for-seniors
- Seniors Blue Book was not involved in the creation of this content.
Other Articles You May Like
Understanding Your Digital Footprint
Digital what? Footprint? You may be thinking thats what you leave behind at the beach. While that may be correct, it is also what you leave behind every time you provide your email, set up a new online account, or allow your data to be tracked. Your digital footprint is the trail you leave behind with Location services on your phone. It is the data you leave behind when commenting on Aunt Sallys Facebook page, sharing your familys vacation pictures on Instagram, or traipsing around the internet to various sites looking for that cute Lladro figurine your mother wanted for Christmas. All of it tells something about you whether you realized it was happening or not.Most of the time, the sharing of your data what you do, how you do it, etc. may not be a big deal. Or is it? The reality is that your data supports big business every day. It is collected, bought and sold (mostly without your knowledge) by data brokers (i.e., Acxiom, Epsilon), credit and identity bureaus (i.e., Experian, Equifax, TransUnion), and Big Tech Companies (i.e., Google, Amazon, Meta, Microsoft, Apple) that share your data with their partners and ad networks.The danger to you is when there is a data breach at one of the many sites that has your data and your data is captured and posted on the dark web. This enables nefarious characters to better target you for scams and potentially steal your identity. Call Lily in the Details today 941-237-0157 and schedule Understanding Your Digital Footprint, Navigating the Online World Safely and Wisely for your community.
Financial Services in Boulder, CO
A move, a change in care needs, or the loss of a spouse can turn a familiar retirement budget into a list of new decisions. Before meeting with a financial professional, identify the question you want answered. You might need to understand what a move would do to your monthly expenses or how much flexibility you have if care costs rise.What Financial Services CoverFinancial services can include financial planning, investment advice, insurance, or help with other money decisions. The scope depends on the professional and the firm. If your immediate question is about paying an overdue bill or applying for a public benefit, a local assistance program may be the better first call. If youre weighing how to use savings or investment accounts over time, ask whether an adviser can address that specific question. Jetty Financial - Rich GaldieriPhone: 303-710-5015Richard Galdieris public professional profile identifies Jetty Financial. The SECs Investment Adviser Public Disclosure database identifies him under CRD number 8206153 with Global View Capital Management LLC in Lafayette, Colorado. Ask which firm would provide the service and appear on your written agreement. The firms name gives you the information you need to review the right disclosures and direct follow-up questions. Ask What the Engagement IncludesDescribe the decision youre facing and ask what the professional can provide in writing. That may mean a one-time review, a planning engagement, or ongoing investment management, depending on the firms services. Ask which fees apply, how they are calculated, and whether any products or third parties carry separate costs. Investor.gov offers a tool to check registration and review relationship disclosures. Why This Matters in BoulderIf youre deciding whether to stay in your Boulder home or move closer to family, use actual costs for both options. For your current home, pull recent bills for taxes, insurance, maintenance, and any paid help. For a move, gather quotes for housing and services you expect to use. Put one-time expenses, such as moving or preparing the house for sale, on their own list so you can compare recurring costs clearly.How to Get Started1. Put Your Main Question on One PageList income sources, regular expenses, and the change you expect in the next year. Bring rough figures to an introductory conversation and ask how the firm handles confidential documents before sending account statements.2. Confirm Fees and ResponsibilitiesAsk who will work with you, what you will receive, and how much the engagement is expected to cost. If you are considering ongoing services, ask how often you would meet and what happens if you end the relationship.3. Take Time to Review the AgreementRead the written scope and fee terms before deciding. If your question also involves taxes or legal documents, identify which parts you should take to a tax professional or an attorney. Related Seniors Blue Book Categories Financial Services Elder Law Estate Planning
Financial Assistance in Boulder, CO
A utility bill can be manageable one month and hard to cover the next. If youre living on a fixed income or helping an older family member sort through overdue notices, start with the bill or expense that has the closest deadline. The City of Boulders Older Adult Services case managers can help eligible residents understand what assistance may be available and where to apply.What Financial Assistance Can Help WithFinancial assistance programs help eligible households cover essential expenses or connect with resources that reduce those costs. Programs may address a one-time problem, such as a bill that came due unexpectedly, or an ongoing need, such as difficulty paying for groceries. Each program sets its own rules and deadlines. A case manager can help you identify which applications are worth pursuing.City of Boulder Older Adult ServicesPhone: 303-441-4388 The citys Older Adult Services team works with Boulder residents age 60 and older and their caregivers. Case managers provide information and referrals, help people understand available options, and offer short-term case management. The city also provides financial assistance for eligible clients. Its published screening criteria include age, residency, income, and the type and circumstances of the request. What to Bring Up on the First CallDescribe the immediate problem in plain terms. I received a shutoff notice with a date next week gives a case manager a clearer starting point than I need help with bills. If the same expense has become hard to cover every month, say so. That gives the case manager a chance to discuss ongoing resources as well as any immediate options.Why This Matters in BoulderA Boulder mailing address and residence within Boulder city limits can mean different things for eligibility. If youre unsure whether your address qualifies, give the case manager your street address before gathering paperwork. Older adults who live elsewhere in Boulder County can start with the countys Area Agency on Aging for help identifying resources that serve their address. How to Get Started1. Find the DeadlineHave the most recent bill or notice handy. Write down the amount due, the due date, and any shutoff date or other deadline shown. Tell the case manager about the deadline at the beginning of your call.2. Ask What Documents You NeedCall 303-441-4388 and ask which documents the city needs for your particular request and how to submit them. Keep copies of any application and the name of the person you spoke with.3. Confirm the Next StepBefore you hang up, ask who will follow up, how to check the status, and whether there is another program to contact in the meantime. If you are calling for someone else, ask whether they need to join the call or give permission for staff to discuss their application. Related Seniors Blue Book Categories Area Agencies on Aging Care Management Care Coordination