There’s a lot to think about as you approach your Golden Years, and many of these decisions revolve around finance and living arrangements. Deciding where to live for the rest of your life is a big choice: you’ll want accommodations that suit your needs. According to Oz Architecture, senior living is designed to optimize the senior living experience by identifying obstacles for aging residents and creative solutions to better their physical space and overall lifestyle.
Financial planning, on the other hand, involves not only taking care of the rest of your days, but the days of your children as well. It’s best to have a plan in motion well ahead of time, allowing you to enjoy your senior years without worrying about funds and long-term management. Here are a few financial tips that every senior should follow.
Get Expert Help
Seniors should get help from expert financial advisors when it comes to managing their estates. These advisors will help seniors make better, wiser decisions about how to invest their money for long-term use and how to ensure funds are properly allocated after they’ve passed.
You should also have a lawyer, and preferably one that specializes in Elder law. These lawyers are members of the National Academy of Elder Law Attorneys (NAELA), and are highly experienced in assisting with legal problems that the majority of aging Americans and people with disabilities face. Elder law attorneys handle a wide spectrum of legal issues pertaining to these groups, including retirement, social security, and estate planning. And financial matters aren’t the only areas of expertise here; they’re also experienced with long term care facilities and managing assisting living costs.
Develop A Spending Budget
With limiting expenses, it’s important to develop a proper budget for the rest of your lifetime. You can start exploring new ways to cut costs. For example, if you don’t use your car to travel much anymore, you might want to negotiate the price of your auto insurance.
Additionally, it’s important to be careful with credit cards. Accumulating additional debt during senior years can be harmful to both you and your family. It’s possible that one of your family member’s may be held accountable for that debt. Therefore, don’t charge your cards unless you can pay for the balance in full and avoid interest fees.
During this process, you’ll also want to review your current bank statements to look for monthly or annual charges that you no longer want. After all, studies have shown that every year, consumers are charged hundreds of dollars from companies they don’t realize are charging them, or for services they no longer use. Many products auto-renew or are charged after a free trial is forgotten. Lastly, review your credit report to look for discrepancies that could affect you later down the line.
Have A Backup Plan
Every senior should prepare to address the highly possible scenario of not being able to manage their own finances. For this reason, you should have a written list stored somewhere safe that details your account numbers and financial institutions. Your lawyer can also help you decide what to do in this area. For example, you may want to have a Power of Attorney (POA) in place to accommodate for this. Power of Attorneys can make key financial decisions on your behalf if you can’t make sound financial or medical decisions on your own.
There are different types of POAs to accommodate your circumstances. A durable Power of Attorney is able to to assume their agreed upon role immediately upon signing, while a springing Power of Attorney goes into effect when the other individual has officially been declared incapacitated. Alternatively, you may want to consider a co-owner for a deposit account. A co-owner is able to make any type of transactional changes to your account, and therefore must be someone you trust completely.
Be Careful With Annuities
An annuity is a contract between you and an insurance company (or another institution like a bank) that offers a lump sum or series of payments over a set period of time. Once you’ve put money into that policy, you’re guaranteed an outcome. However, there are many different types of income and income and they all work differently. Depending on your current situation and the type of annuity you’re interested in, they can be harmful or helpful. There are pros and cons to different types of annuities, and you’ll need to sit down with your lawyer to discuss whether an annuity works for you and what type is best.