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

Posted on

Sep 07, 2023


Florida - Sarasota, Bradenton & Charlotte Counties , Florida - Southwest

Share This

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 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.

Author Leo Adam Biga

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

Other Articles You May Like

Navigating Long Term Senior Care Costs: What if My Parents Run Out of Money?

As we journey through life, many people find themselves facing one of the most pressing concerns: ensuring that they provide care and support to their loved ones, particularly their aging parents, as they transition into their senior years. Long-term senior care frequently raises questions and concerns, with one of the most common worries being, What if my parents run out of money?The cost of senior care services can indeed be a significant burden on families. Many are apprehensive about the affordability of these services and the potential financial strain they might impose. This is where a comprehensive continuum of care approach, like the one offered by Grace Pointe of Greeley, can make all the difference.Tailored Care for Your Unique NeedsOur team of experienced care professionals adopts a personalized approach to assess the specific care needs of each resident. We commit to ensuring that you dont pay for services that you or your loved one dont need. This ensures that you wont bear unnecessary costs, and your loved ones will receive the appropriate level of care to enhance their quality of life.If the affordability of long-term senior care concerns you, Grace Pointes approach is here to help. We dedicate ourselves to providing the right care at the right cost, supporting both your financial peace of mind and your loved ones well-being.To learn more about our long-term senior care services and our continuum of care approach, visit our Grace Pointe of Greeleys Long-Term Senior Care Services page.Frequently Asked Questions About Long-Term Senior CareAt Grace Pointe, we understand the financial concerns that come with long-term senior care, and were here to put your mind at ease. Our continuum of care services is designed to ensure affordability while providing your loved ones with the precise level of care they need. We understand that every individual is unique, and their care requirements can vary greatly which is why we have compiled this list of FAQs about long term senior care services below.What is long-term senior care, and when is it needed?Long-term senior care is a comprehensive service designed to provide assistance and support for seniors who may require help with daily activities due to age-related challenges or medical conditions. It becomes necessary when individuals find it increasingly difficult to maintain their independence and well-being.How do I know which type of long-term senior care is suitable for my loved one?Our experienced care professionals at Grace Pointe will assess your loved ones individual needs and recommend the most appropriate level of care. We believe in personalized care plans to ensure your loved one receives the best possible care.What is the cost of long-term senior care at Grace Pointe, and how can I afford it?The cost of long-term senior care varies depending on the level of care and services required. Grace Pointe offers a continuum of care approach, ensuring you only pay for the care your loved one needs. We will work with you to explore financing options, including community resources for  Medicaid and Veterans benefits, to make care more affordable.Can I visit my loved one in long-term senior care at Grace Pointe of Greeley?Yes, we encourage family visits and understand the importance of staying connected. We also encourage you to enjoy activities and events to see the life of Grace Pointe experienced by your family members.  There are some guidelines for visiting after hours to ensure the safety and comfort of the Grace Pointe residents, which can be discussed with our staff.How can I learn more about Grace Pointes long-term senior care options?You can explore more details about our long-term senior care services on our Long-Term Care Services page. Feel free to contact our team for specific information and to request a tour.How can Grace Pointe of Greeley help ensure that I dont pay for services my loved one doesnt need in the long term?At Grace Pointe, we understand the importance of affordability in long-term senior care. We offer a continuum of care approach, which means we tailor care plans to your loved ones specific needs. By doing so, we ensure that you only pay for the necessary services, maximizing affordability while maintaining high-quality care. Can I modify my loved ones care plan if their needs change over time?Yes, we understand that care needs can change. At Grace Pointe, we regularly review care plans and adjust them to accommodate changing requirements to ensure your loved one receives the best care.For answers to common questions about long-term senior care and all our services, visit our FAQ page.Dont let financial concerns hold you back from providing the best care for your aging parents. Grace Pointe of Greeley is here to support you every step of the way. Reach out to our care team with any other questions you may have about your familys care.

Time for tax-loss harvesting?

As you know, the gig economy has been booming over the past several years. If youre thinking of using your skills to take on a side gig, what should you do with the money youll make?Theres no one right answer for everyone, and the decisions you make should be based on your individual situation. And of course, you may simply need the extra income to support your lifestyle and pay the bills. But if you already have your cash flow in good shape, and you have some freedom with your gig money, consider these suggestions: Contribute more to your IRA. If you couldnt afford to contribute the maximum amount to your IRA, you may find it easier to do so when you have additional money coming in from a side gig. For the 2023 tax year, you can put in up to $6,500 to a traditional or Roth IRA, or $7,500 if youre 50 or older. (Starting in 2024, this extra $1,000 catch-up contribution amount may be indexed for inflation.) The amount you can contribute to a Roth IRA is reduced, and eventually eliminated, at certain income levels. Look for new investment opportunities. If youre already maxing out your IRA, you might be able to find other investment possibilities for your side gig money. For example, if you have young children, perhaps you could use some of the money to invest in a 529 education savings plan. A 529 plan offers potential tax advantages and can be used for college, qualified trade school programs, and possibly some K-12 expenses. Please keep in mind that potential tax advantages will vary from state to state. Build an emergency fund. Life is full of unexpected events and some can be quite expensive. What if you needed a major car repair or required a medical procedure that wasnt totally covered by your health insurance? Would you have the cash available to pay these bills? If not, would you be forced to dip into your IRA or 401(k)? This might not be a good move, as it could incur taxes and penalties, and deprive you of resources you might eventually need for retirement. Thats why you might want to use your gig earnings to help fund an emergency fund containing several months worth of living expenses, with the money kept in a liquid, low-risk account. To avoid being tempted to dip into your emergency fund, you may want to keep it separate from your daily spending accounts.   Pay down debts. Most of us will always carry some debts, but we can usually find ways to include the bigger ones mortgage, car payments and so on into our monthly budgets. Its often the smaller debt payments, frequently associated with high-interest-rate credit cards, that cause us the most trouble, in terms of affecting our cash flow. If you can use some of your side gig money to pay down these types of debts, you could possibly ease some of the financial stress you might be feeling. And instead of directing money to pay for things you purchased in the past, you could use the funds to invest for your future.As weve seen, your side gig money could open several promising windows of opportunity so take a look through all of them. Chad Choate III, AAMS828 3rd Avenue WestBradenton, FL This article was written by Edward Jones for use by your local Edward Jones Financial Advisor. Edward Jones, Member SIPC

Time for tax-loss harvesting?

Its been a bumpy year for the financial markets which means that some of your investments may have underperformed or lost value. Can you use these losses to your advantage?Its possible. If you have some investments that have lost value, you could sell them to offset taxable capital gains from other investments. If your losses exceed gains for the year, you could use the remaining losses to offset up to $3,000 of ordinary income. And any amount over $3,000 can be carried forward to offset gains in future years. This tax-loss harvesting can be advantageous if you plan to sell investments that youve held in taxable accounts for years and that have grown significantly in value. And you might receive some gains even if you take no action yourself. For example, when you own mutual funds, the fund manager can decide to sell stocks or other investments within the funds portfolio and then pay you a portion of the proceeds. These payments, known as capital gains distributions, are taxable to you whether you take them as cash or reinvest them back into the fund. Still, despite the possible tax benefits of selling investments whose price has fallen, you need to consider carefully whether such a move is in your best interest. If an investment has a clear place in your holdings, and it offers good business fundamentals and favorable prospects, you might not want to sell it just because its value has dropped. On the other hand, if the investments youre thinking of selling are quite similar to others you own, it might make sense to sell, take the tax loss and then use the proceeds of the sale to purchase new investments that can help fill any gaps in your portfolio. If you do sell an investment and reinvest the funds, youll want to be sure your new investment is different in nature from the one you sold. Otherwise, you could risk triggering the wash sale rule, which states that if you sell an investment at a loss and buy the same or a substantially identical investment within 30 days before or after the sale, the loss is generally disallowed for income tax purposes.Heres one more point to keep in mind about tax-loss harvesting: Youll need to take into account just how long youve held the investments youre considering selling. Thats because long-term losses are first applied against long-term gains, while short-term losses are first applied against short-term gains. (Long-term is defined as more than a year; short-term is one year or less.) If you have excess losses in one category, you can then apply them to gains of either type. Long-term capital gains are taxed at 0%, 15% or 20%, depending on your income, while short-term gains are taxed at your ordinary income tax rate. So, from a tax perspective, taking short-term losses could provide greater benefits if your tax rate is higher than the highest capital gains rate.Youll want to contact your tax advisor to determine whether tax-loss harvesting is appropriate for your situation  and youll need to do it soon because the deadline is Dec. 31. But whether you pursue this technique this year or not, you may want to keep it in mind for the future because youll always have investment tax issues to consider.   Chad Choate III, AAMS828 3rd Avenue WestBradenton, FL  This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.Edward Jones, Member SIPC

Local Services By This Author

Right at Home Sarasota

Non-Medical 2344 Bee Ridge Rd #110, Sarasota, Florida, 34239

Right at Home is Sarasota County's leading Joint Commission Accredited private duty home care agency. Our reputation as the areas most trusted and professional home care provider is built on decades of experience, from the front office to the front line, serving and supporting older adults and their families in the comfort of whatever setting they call home. From assisting with household chores to nursing care, we offer a full spectrum of highly tailored care services to meet the diverse and changing needs of our clients as they advance through their aging journey.

Right at Home Sarasota

Home Health 2344 Bee Ridge Rd #110, Sarasota, Florida, 34239

Right at Home is Sarasota County's leading Joint Commission Accredited private duty home care agency. Our reputation as the areas most trusted and professional home care provider is built on decades of experience, from the front office to the front line, serving and supporting older adults and their families in the comfort of whatever setting they call home. From assisting with household chores to nursing care, we offer a full spectrum of highly tailored care services to meet the diverse and changing needs of our clients as they advance through their aging journey.