Every person must manage their money to have enough to cover their expenses. As a person ages, they need to adjust their budget accordingly. Living on a fixed income can be frightening to many. With ample preparation, this phase of life does not have to be terrifying.
Social Security
Tens of millions of Americans currently receive Social Security payments. They may rely on these payments to continue living in assisted living or use the funds to age in place. However, countless individuals find Social Security does not cover all of their financial needs. They need to know how much they will receive each month and whether they need to generate additional funds to cover their expenses. Many factors play a role in this, so every person must visit the Social Security website and learn their estimated payment.
Retirement Accounts
Retirement income accounts are another source of income for seniors. The Survey of Consumer Finances conducted by the Federal Reserve Board found that the median net worth of Americans between the ages of 55 and 64 is $212,500. Some of this money comes from Individual retirement accounts, while other funds are from pensions. Every person must know their income sources and how to maximize them to ensure they can live comfortably when they retire.
Insurance and Healthcare
Healthcare costs can eat a significant portion of a senior’s income. Many believe Medicare pays all health care costs, but nothing is further from the truth. Individuals must pay for aspects of Medicare and will still have out-of-pocket costs they must cover. Experts recommend budgeting almost $300,000 for healthcare expenses during retirement for couples. Military veteran benefits and supplemental security income may be other sources of funds. However, seniors may also look into different programs, such as state health insurance assistance programs and Medicare Savings programs for seniors.
Discounts
Seniors can stretch the funds they have by taking advantage of discounts. GoodRx and America’s Pharmacy offer prescription discount cards, and seniors may benefit from free or low-cost dental services. Many internet and communication companies offer low-cost services for men and women over a certain age, and countless retailers offer discounts and savings. Seniors may also be eligible for transportation discounts, low-cost medical alert systems, and free or discounted hearing aids. Seniors should also look into discounts on homeowners insurance, vision care, real estate taxes, and more.
Reverse Mortgage
Seniors who age in place may opt to take out a reverse mortgage. Doing so allows them to take a loan against the equity they have in their home. The homeowner does not pay loan payments as the loan only comes due when the house is sold or the homeowner dies. Before opting for a reverse mortgage, the senior should consult with financial advisors and family members to ensure they make the most of these funds. The United States Department of Housing and Urban Development offers the home equity conversion mortgage, and 90% of reverse mortgages in America are obtained under this program. The funds received from this program can help the seniors remain in their homes.
Seniors often wish to leave their heirs money and assets. Estate planning can help them do so. The financial advisor will assist the seniors in maximizing their funds so they can leave their beneficiaries as they desire through financial planning. Approximately half of American adults over the age of 55 lack a will. For those who do have a will, approximately 23% need to be updated. However, a will is only part of the estate plan. Seniors should also have a durable power of attorney and healthcare directive so their wishes can be fulfilled when they cannot speak for themselves or after they pass away. A financial advisor or estate planner will help the senior with these tasks to ensure nothing is overlooked and the senior is covered in every way.
