Effectively managing your finances following retirement and into your Golden Years brings with it challenges that need to be addressed so that you can continue to live the lifestyle to which you’ve become accustomed. One way to do this is to begin planning for retirement early in your working life and to work within the confines of a budget once you retire. Living within your means allows you to enjoy the perks you had when you were employed while still keeping a comfortable nest egg. Maintaining long-term financial stability requires thoughtful planning and may involve making changes to your daily lifestyle. Remember, financial planning for your retirement and senior years is more about long term goals than short-term.
Here are some money management tips to put into place prior to retirement. If you’re already retired, these are tips that can be implemented even now to help you enhance your financial stability:
Clear up your long term debt. Pay off your mortgage and pay down your credit cards. Revolving debt can wreak havoc on your savings. Having to worry about making monthly debt payments can negatively impact your long term financial stability. Additionally, knowing that your debts are paid off, or paid down, will add to your peace of mind.
Writing and sticking to a budget. To remain financially viable into your retirement you will need to live within a budget. Take time and make certain you include all of your expenses when making your budget. Include items such as health insurance, auto insurance and long-term care payments in addition to the income you’re bringing in.
Take care of your health. Illness can negatively impact not only your overall health but your ability to remain within your budget. Eating healthy meals, remaining active and having regular medical check-ups will go a long way in helping you enjoy your retirement years.
Stay involved. Volunteer, take a class at a local community college, visit neighbors and friends. Remaining involved with friends and continued learning leads to better mental acuity and could even ward off health related mental deterioration.
Do you need to downsize? If you’re still living in the home in which you raised your children, it may be time to consider downsizing to a smaller, more efficient home. Whether you move into a small home or an assisted living or retirement facility, taking the time to address trip and fall hazards and upgrading the bathroom and other rooms in the house to be senior friendly make the home safer as you age. Individuals that may be living alone or dealing with balance issues or other health concerns may want to consider equipping the home with a medical alert device as a way to have immediate access to health care in the event of an emergency.
Prior planning will help you enjoy your retirement years with grace and ease.
There is never a wrong time to begin tracking your income and spending, but truly the more thoroughly you understand your money habits and gain control of your budget, the more quickly you will be able to take charge of your future. When retirement is just around the corner, you may feel you’ve lost valuable time to gain control of your finances, but there is still time.
Here are three strategies to help you set up a workable budget and stick to it:
Save more money. This may seem a simple solution, but in many cases the simpler the solution, the easier it is to implement. Once you’ve charted your income and expenses, you can look at what’s left over and make a decision to bank 10 to 20% (or more) of your income. If you find that 10% is too much, start smaller and work your way up. Being successful at socking away 3% of your income weekly will help you build toward a higher percentage going into your savings on a regular basis. Once you discover that you can live without that additional 3% or more you can move your savings amount up to the ultimate goal you’ve chosen.
Spend less money. Saying you’re going to “save money and cut expenses” is a vague generalization and won’t offer a measurable goal. Set a specific goal of, “I’d like to spend $10 a week less on take-out food,” or “We’re not going to use a credit card for purchases of less than $100.” Those goals are measurable and achievable. Unsubscribing to department store emails and updates may help you save money because you won’t be tempted to give into an impulse purchase. Also, before you make a purchase over a certain dollar amount, take time to ponder that purchase. Studies show that individuals that don’t give into an impulse purchase, but who instead take a few days or a week to determine whether they truly need an item will spend close to 25% less annually than those who purchase on impulse. Consider the impact on your long-term financial goals before making a purchase of a large ticket item.
Pay down your debt. Paying down credit card balances, especially as you near retirement age, makes incredible financial sense. Paying down your debt also allows you the opportunity to put more money into your bank account. In addition to freeing up your money, paying off debt can also lower your stress simply because they won’t be looming over your retirement years. You may need to put the brakes on some of the activities you currently enjoy such as dinners out with friends, splurge purchases, etc. Look for free or low cost entertainment options, invite friends to a potluck at your home, take time to consider whether you truly need that large ticket item. If you know, for example, that you have set a goal to pay cash for all purchases of $50 or less it may make you pause to consider whether you need to make the purchase at all. Putting an item on a credit card rarely requires thought and is usually not thought of again… until the bill comes due.
Having sound financial practices in place prior to your retirement will help you more fully enjoy your golden years.
As we age, some individuals can become the target for a financial crime, identity theft, home break-in or some other scam. Boomers raised in an era where being rude to a solicitor on the phone or door to door can actually put them in a more vulnerable position. In some cases, those who would perpetrate a crime against the elderly will either rely on charm or bullying tactics to get the information that they seek. While a financial crime is a devastating time for anyone, it can be even worse for the elderly as they may not only question their ability to remain independent but will become fearful of living alone.
As a caregiver, there are steps you can take to protect your elderly loved ones:
Make sure the home is secure. Check the locks on doors and windows. Install a home alarm system with motion detectors and automatic indoor & outdoor lights. Make sure to post signs alerting vandals to the fact that the home has a security system. Another safety measure is to equip your relatives with a emergency medical device; these medical alert pendantsprovide a lifeline to outside help and assistance in the time of need.
Trim all bushes around the house to eliminate any potential hiding places for a would-be burglar. Install doors with peepholes and advise them to not open the door to strangers. Never put keys under a door mat or other outdoor hiding spot. These are too easily discovered. Ask a trusted neighbor or friend that lives close to hold onto the extra key.
Make certain the house number is painted in bright colors and large numbers to make it easy to find if emergency responders need to visit.
Make certain additional cash isn’t left lying around the house. Keep enough cash on hand for daily needs, but keep large sums in the bank.
Warn your elderly relatives to never give any personal or financial information over the phone. Make sure they are aware that no one – other than a family member – would ever be calling to solicit financial information. If your relatives are tech savvy and have signed up for online banking, make sure they are knowledgeable about the scams where it looks like their financial institution is asking them to sign in using the provided link. Their bank would never make this request, it is a scam.
Don’t let your relatives make deals with door-to-door sales people. The scams perpetrated on the elderly involve everything from being overcharged for putting a new roof on the home to sealing the driveway to simply letting someone into the house so they can get the “lay of the land” and break in later. If, for example, your relatives need a new vacuum cleaner or a roof or driveway work, they should talk to you to help them get estimates from reputable contractors or take them to the store to make their purchases.
If your relatives are still mobile and drive themselves to their appointments make sure they never carry more cash with them than what they need for that excursion. Also, advise them to not travel into areas with which they aren’t familiar. They should also always lock their car doors each time they get out. In some cases, it’s a good idea to lock the doors when driving along in unfamiliar locations.
These safety tips that will provide both the caregiver and the aging relative with peace of mind as they continue to age in place.
There have been numerous reports detailing the gender gap among unpaid caregivers in the United States, most however, have focused on young families and the care they provide to their children. Recently, however, the Population Reference Bureau examined the gender gap in caregivers later in life to explore whether marital status and retirement made a difference in how men and women help others.
When it comes to men and women in caregiving, not surprisingly, there are distinct differences. Most elderly individuals – 65 percent – with long-term needs rely exclusively on family and friends to provide assistance. When it comes to who is providing the care, it is estimated that female caregivers spend 50 percent more time providing care than men. Continue reading →
By PAULA SPANAnn Logan, with Henry, in her New York apartment.Ann Logan and her three sisters grew up in Delaware; none of them have children. Their stepbrother and seven first cousins on both sides are childless, as well. “Each of us had different reasons,” she told me.
Ms. Logan, the eldest sister at 63, doesn’t regret her decision not to be a parent, but she does worry about the future as she and her relatives all age.
The Older Americans Act, first enacted by Congress in 1965 helps seniors to stay independent and healthy through a wide range of services and programs. These programs include:
• Meals on Wheels
• senior center services
• support for family caregivers
• home and community services
• health promotion and disease prevention
• civic engagement
• community service employment for low-income older workers
In coming months, Congress will be voting on Older Americans Act (OAA) funding for 2011. The NCOA (National Council on Aging) is urging Congress to adopt the following in the FY 2011 Labor-HHS-Education Appropriations legislation:
• Funding for SCSEP at least equal to the FY10 level of $825.4 million. Increases proposed by the Administration’s Caregiver Initiative, including $48 million for the National Family Caregiver Support Program and $48 million for Supportive Services and Senior Centers
• A 12% across-the-board increase for other OAA AoA programs
• Investments in initiatives added to the OAA in 2006, including $4 million for the National Center on Benefits Outreach and Enrollment and $3 million for Multigenerational and Civic Engagement
• Funding for SCSEP at least equal to the FY10 level of $825.4 million.
We urge you to contact your representatives in Congress and tell them that you support the recommendations made by NCOA.org. Let’s encourage Congress to support our older Americans!