As a senior, you've navigated through countless possible stages of life: childhood, teenage years, early adulthood, working years, married life, parenthood, and now, retirement. Just as each chapter in your life came with different challenges, so does this one. Figuring out how to manage your money in retirement is one of the top challenges you may be facing right now. Hopefully the following money tips for older adults can help you do just that: enjoy a long and happy retirement.
How Long Could Your Retirement Last?
First, let's consider how long your retirement could last for; that'll give you time frame to go by. Although the average life expectancy of Americans is 77.5, that number doesn't give the whole picture. Why not? Forbes explains it this way: "The reason is that published life expectances are calculated from birth and take into account everybody who dies in childhood and adulthood." It can be hard to wrap your head around, but Social Security provides an actuarial life table that helps put it into perspective.
For example, let's say you're a fifty year old woman. According to the table, your life expectancy is eighty-two. The older you get, though, the more likely you are to keep going. As a seventy-five year old woman, your life expectancy is eight-seven and a half, and at ninety, your life expectancy is 94.
On the other hand, what if you're only a thirty-year-old woman? Your life expectancy is just over fifty. That doesn't mean that thirty-year-olds should only plan to make ends meet until they hit fifty!
It's clear that life expectancies can only tell you so much. How can you plan for retirement, then, if you don't know how long to plan for?
Getting the help of a CERTIFIED FINANCIAL PLANNER™ is a good step. They'll be able to help you figure out the best choices for your circumstances. They may guide you toward sources of income that last for life, such as Social Security, traditional pensions, and lifetime annuities.
One thing's for sure: retirees are living longer than ever, so a solid retirement plan is important.
Manage Money from Multiple Sources of Income
One challenge almost all retirees face is income coming at them from many different sources. Social security comes one day, an RMD another, an annuity distribution another; it can be a challenge to keep track of it all. This is especially true if you're used to the consistency of a weekly or biweekly paycheck.
A go-to step to keep things straight is to make a clear budget. List exactly what income you'll receive, and then what your expenses will be. Some retirees choose to assign a certain source of income to the same bill every time, while others have all the income and bills come and go from the same account.
One potential problem is having an automated bill come through before your income does. Keeping a cash cushion in your account helps you avoid overdrawing in situations like that.
No matter how you go about it, organization is key.
Decide Where to Live As You Age
Fresh retirees often has plans of travel, or a desire to move somewhere they've always dreamed of (like anywhere away from New England winters!). As time passes, though, practicality is just as important as enjoyability. Seniors face a challenging question: where should they live out their retirement?
Many opt to age at home, where they may have raised a family or lived the majority of their adult life. The pros are obvious: it's a familiar, happy place for them, likely with an existing support group of friends, family, and neighbors. They have a sense of independence and autonomy. Still, it's not always the best fit for the new needs that come with aging.
Some questions to consider as you contemplate whether to age in place:
- Can you keep up with the physical requirements of caring for your home?
- How much support do you have, such as nearby family and friends looking out for you?
- Are you within reasonable travel distance to necessary places, such as the grocery store or doctor's office?
- Does your current living situation match your level of needed support?
These are just a few questions to get you thinking objectively about your living situation. If you're starting to look into other living choices, there are many options –– depending on your personal needs.
- 55+ communities
- Independent living
- A family member's home
- Assisted living
- A nursing home
Of course, your financial situation also plays a major part in housing choices. Are you renting or do you own your house? Is it paid off? Do you have long-term care insurance?
Change can be extremely difficult, especially if you've lived in the same place for much of your adult life. There may be happy memories that are hard to leave behind. Still, carefully considering your current and future needs can help you to live out your golden years happily.
Watch Out For Elder Scams
Sadly, scammers often see seniors as ideal targets. They believe these retirees are trusting and polite, with savings to take advantage of. There are more cases of elder fraud than ever before. Some common ones seniors deal with:
Romance scam – When a criminal pretends to be romantically interested in a senior seeking companionship via social media or a dating site
Grandparent scam – When a criminal claims to be a grandchild in need of immediate financial help
Tech support scam – When a criminal impersonates a technology support representative to gain access to a device
Family/caregiver scam – When someone close to a senior takes advantage of them, such as a family member or caregiver
These are just a few of many scams out there, so what are some red flags to watch for?
- Pressure to act quickly
- Unexpected contact from a stranger
- An offer that is too good to be true
- An unusual payment method
- Typos in written messages
- A request for personal information
What it comes down to is this: better to be safe than sorry. When you're not sure, don't be afraid to ask someone you trust for help.
Take Advantage of Senior Discounts
When it comes to making your money last through retirement, senior discounts are a great help. It's not just about getting a free doughnut with your coffee, either; many discounts out there can make a significant difference. Here's a sampling of what's out there for you:
Retail
Goodwill – 10% off every Tuesday for ages 60+
Rite Aid – Rite Aid Rewards 65+ – Earn 5x points on in-store purchases on the first Wednesday of the month. Also receive a free pharmacist consultation to review medications, immunization needs, blood pressure screening, and Medicare Part D questions
Kohls – 15% off ever Wednesday for ages 60+
Restaurants
IHOP – Choose from their 55+ menu for lower prices
Outback Steakhouse – 10% off food and nonalcoholic drinks with an AARP card
Applebee's – 10-15% off food and nonalcoholic drinks, depending on location
Dunkin Donuts – 10% off for ages 55+
Activities
National Parks – $80 for a lifetime pass for ages 62+, which grants access to over 2000 locations
Ticketmaster – Two-for-one tickets to select shows, for AARP members that are 50+
SilverSneakers – Free health and fitness classes and gym memberships at thousands of locations, available to ages 65+ and a member of certain Medicare plans
Travel
Carnival Cruises – Specialty senior pricing for ages 55+
Budget Rent a Car – Save up to 35% off Budget's base rates, plus get an upgrade on compact through full-size car class bookings as an AARP member
Amtrak – 10% off most rail fares on most Amtrak trains for ages 65+
These are just the tip of the iceberg for what's available for seniors. From prescription help to vision and hearing assistance, the list is endless.
Work With a Financial Professional
There's no denying it: juggling your finances as a senior is no easy feat. Between multiple streams of income, insurance and healthcare options, housing choices, and more, it can be overwhelming. The guidance of a financial professional, such as Eric, can help. He can take a look at the ins-and-outs of your situation and discern where tweaks may be needed. Also, as a CERTIFIED FINANCIAL PLANNER™, he's qualified to produce a clearer picture of your financial future than a typical financial advisor would be. If you'd like that extra level of assistance, feel free to reach out!