A 2018 report by Yahoo! Finance found that in 10 years, there will be about 12,000 people turning 65 years old each day. When the report was written, there were about 10,000 people. If another statistic is to be believed, the average American male will live until 86 years old, while the average female American will live up to 88 years old.
The period between 65 years old and 86 to 88 years old is a long time, and now more than ever, with the global economy growing more increasingly volatile due to unforeseen circumstances like a global pandemic, seniors need to be smarter and more strategic about how they spend their retirement money. Just because you’re in your twilight years doesn’t mean you need to be less smart with your money. Here are some key financial tips for senior citizens.
Exhaust your senior benefits
One example of a privilege you can take advantage of is a reverse mortgage loan or a type of home loan that’s recommended for people who are 62 years old or older. This type of loan can help people in their 60s and above tap into their home’s equity because, as retired homeowners, it’s an opportunity to pay their regular expenses according to how they want the proceeds of the loan disbursed. If you are the type of retiree who’s living on more meager retirement payments or monthly Social Security benefits, a reverse mortgage might be the most convenient way for you to buy a home. It may even allow you the opportunity to afford to do the activities you’ve always wanted to do, such as spending more time with your family, getting a better car, or making some necessary home upgrades.
The National Council on Aging is also a wonderful resource for more than 2,500 benefit programs. Research how these benefits can help you be more strategic with your resources.
Stay on track with your budget
It may be tempting to be less stringent with your spending during your retirement period, but the truth is that there are no two ways about it—we never graduate from proper budgeting and financial planning. Here are some tips for managing your budget and resources well:
- The safest route to take is by factoring in all possible contingencies because you never know when life throws you a curveball. It’s always smart to expect the unexpected.
- Be realistic. More often than not, an individual’s retirement income won’t reach their peak earning years. Even if you planned carefully and for a long time, it’s still wiser to maximize the nest egg you’ve saved up by limiting your expenses and establishing a detailed and comprehensive budget.
- Once you’ve developed a budget, monitor it as well as you can and develop the discipline of staying on track. It’s one thing to create a budget, but enforcing it is a different matter entirely.
- Be strategic about the entertainment costs. Consider going to a matinee show instead of going during the evenings so that you can save a few dollars. Exhaust benefits like senior meal deals and other benefits and deals you can get your hands on. The best part about being a retiree is that your work-related expenses will be shaved off, so half the battle has already been won for you.
It’s a difficult thing to admit, but one of the things we have to contend with as we grow older is the probability of any form of cognitive decline. We have to anticipate that we won’t always be on top of all the details of our financial life, which is why now is the best time to learn automation, digital banking, and all types of technological tools at your disposal.
Ask for help from your child or a younger person you trust to help you set up your funds. Streamline your resources by automating all your income sources from your pension funds so that they immediately go to your investments or disability payments. These processes can help save you from a lot of inconveniences. Learn how to automate all your regular payments and bills and choose a specific day of the month that makes the most sense for you. Make sure you have enough buffer, so you never have to experience shortage on the off chance that a source of income finds itself delayed.
Never stop learning
Last but not least, make learning a habit. Financial literacy will always lead to better money management, wiser and more strategic investments, and better preservation of wealth and resources. Do yourself a favor and always learn more about how you can shield your finances in this chapter of your life.