Smart Financial Planning For Seniors

One of the greatest fears that seniors have today is outliving their money.  For many older adults, advances in healthcare has been a double-edged sword.  They are living longer, healthier lives but increased lifespans have contributed to financial worries because their financial reserves can’t keep pace with their physical longevity.

The concern is real.  It’s estimated that almost half of seniors in the USA are stressed about running out of money and they worry about how it will impact their ability to live comfortably during their retirement years.  For many seniors, long term financial planning is no longer an option.  The time to put money aside for the future has passed and most believe they have run out of options to supplement their incomes.

While the situation my seem dire for a lot of older adults living on fixed incomes, there are smart ways that seniors can deal with cash concern problems.  Here’s some examples:

Home Downsizing

The easiest way for seniors to gain greater control over their finances is to adjust their expenditures.  Downsizing the home is one consideration.  A lot of seniors are reluctant to move out of the homes they lived in and raised families, but their reasons for staying put are more emotional than practical.  If a senior has more house than they need to live in comfortably, it’s probably time to consider moving to a home or place that better reflects their current lifestyle.

There are condominium type residences and senior living communities that are not only more affordable than owning and maintaining a larger house, but they also free older residents from many of the mundane, costly and labor-intensive duties that go with keeping a big family dwelling.  In most instances, seniors who relocate to smaller places managed by homeowner associations and community living administrators no longer have to worry about landscaping chores, snow removal, refuse collection, handyman help and many other day-to-day things associated with larger, independent home ownership.

Assess Your Financial Wellness

It’s never too early or too late in life to perform an assessment of your financial wellness.  Even if the time has passed for long-term financial planning, getting advice from money management professionals is always a good idea.

Accountants and financial advisors understand the challenges of aging and trying to stay solvent.  The sooner seniors get expert financial advice, the better they can position themselves for expected and unexpected expenses that will inevitably arise.  Getting advice from financial experts as early on as possible is a proactive step that can prevent or minimize the risks of outliving your money.  Not all financial advisors are the same, so choose one with care.  Look for advisors who are fiduciaries, a term that means they are ethically bound to put your interests first, ahead of their own.  It’s also wise to select an advisor who has deep experience in retirement planning, and you should also get references from friends or satisfied clients to verify their reputation.

Health Care Cost Concerns

Ballooning health care costs are a major concern to all seniors, those with sizeable savings and those living on tight fixed incomes.  The reason why is because there is no way to predict the future.  Even people who have plenty of money set aside can see their cash reserves wiped out due to the exorbitant costs associated with long-term medical care and assisted living.

Health care insurance typically covers only part of the costs.  Even with Medicare and supplemental health care plans, many seniors are forced to absorb medical costs they never planned for and it can impact not only their physical well-being, but also their financial health.  When speaking with a financial advisor, ask about options available to mitigate rising health care costs.  The healthcare marketplace has many plans available to seniors that can protect them better than what they currently have in place.

Plan Now, Not Later

The best time for seniors to review their financial situation is when they are of sound mind and body.  If you wait until your physical or mental health diminishes, you increase the risk of making unwise, reactive decisions.

The bottom line is you can afford to live a long, healthy live if you plan for it.  Having a financial plan that focuses on aging is more than just common sense.  It’s being wise about your dollars and cents.