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Financial Tips for Seniors

Financial matters don’t get less complicated as you age, and it’s more important than ever to have a plan for securing your wealth when entering your senior years. The U.S. Census Bureau reports the average annual income for households of those 65 and older is more than $47,000. How you manage this money is important, as it needs to meet changing household needs, including health care, home upkeep, and essential services.

If it's been a while since you thought about your financial health, consider these money management tips for seniors. You can actually use them any time in your life, but they’re especially useful for aging adults.

1. Learn about scams

If you're like most people, your phone often rings with calls from telemarketers, charities, and others asking for some of your money. The major concern here, however, is scammers. These bad actors will sound like well-meaning organizations, but they will actually use your information to run up your credit card, drain your bank account, or worse.

New scams appear so frequently that it’s often challenging for journalists and the government to stay on top of the latest scheme. To be completely safe, simply avoid sharing any personally identifiable information over the phone, including Social Security Numbers, bank account information, and the names of loved ones and pets. That last point may seem frivolous, but scammers can use those names to potentially hack into your online accounts.

Remember that most government agencies, like the Social Security office and your Medicare provider, won’t call you on the phone to make changes to your account or take money from you. Most, if not all, of their communications will happen by mail.

If you think a call may be legitimate, get in touch with a trusted family member or the authorities before approving the transfer of any funds. They can help you figure out if the call is legit before you suffer any losses. You can also keep track of new scams at the FTC website.

2. Handle end-of-life planning now

No one wants to think about their own death, which is why so many people put off creating wills and estate plans. You may even assume that doing this is too expensive to consider. In reality, you can handle most of the basic documents you need to protect your assets with forms available from your state government.
Contact them to request the best way to set up a power of attorney (who can handle your finances in case you aren’t able to) and your will. You can also reach out to a legal professional for a review and advice, but these steps will at least get you started.

While you're at it, consider creating a living will, if you haven't already. This document tells medical professionals how you want to be cared for in the event you’re incapable of telling them yourself. You can include everything on this form, including whether you want to be intubated and your organ donation wishes. Doing it now, before you become seriously ill, can keep your family from making difficult choices during an already painful time for them.

3. Review and revise your budget

Your budget may seem simple compared to some of the other items on this list, but it’s crucial to ensure your nest egg and any supplemental retirement income truly lasts.

Here are some of the best budgeting tips for seniors:

  • Track monthly spending to see where your money goes, and look for any sudden changes from month to month.
  • Review things like subscriptions and recurring fees that can eat into your budget.
  • Plan for increases in items like Medicare premiums. Then figure out what other budget category you can adjust for the change.
  • Check your savings strategy to ensure you have extra money for unexpected house repairs, medical bills, or legal costs.
  • Don’t forget to budget for fun! You’ve worked hard to enjoy your retirement. Even if your budget is tight, look for ways to enjoy yourself without putting your finances in a pinch.

If budgeting seems overwhelming, consider some of the newer tech tools out there that can make budget management for seniors a breeze. And if you need some help, ask a family member if they can assist you with setting up one of these tools.

4. Secure your valuables (and your home)

One of the best pieces of financial advice for seniors is to keep your prized possessions out of sight of prying eyes and to consider putting them in a secured location outside of their home. From a locked box at the bank to a secured storage unit, there are many ways to secure your valuables when you don’t need access to them.

The same applies to cash, as you should only keep a small amount on you at all times. Also, consider installing a doorbell camera or security technology around your home. If someone does try to come to your home to steal your items, you have evidence for making an insurance claim and possibly even press charges.

5. Keep healthy money boundaries

Perhaps the hardest financial advice for seniors (or anyone) to follow concerns how you give to those you love. If you find yourself often giving out cash or gifts to friends or family, it may be time to rein in these donations and consider keeping more for yourself.

Remember: your income-earning years are largely behind you, and it’s essential to make your money last. If you are continually giving money out to family members, it puts you in a position to run out of cash before the end of your life.

Saying "no" can be difficult, so if you do have trouble, ask a trusted friend, counselor, or leader of your faith community to help you find the right words to say. Your loved ones should respect your wishes, and if they don't, it's likely not a relationship you can salvage by handing over your hard-earned money.

6. Monitor your credit

Even if you’re not using credit cards these days, it’s still important to check on your credit report. In fact, it may be more important to do so during times of low or no credit use, because it’s easy for fraud to go undetected. An important piece of financial advice for seniors is to get a copy of your free credit report from each of the three credit bureaus once a year.

Look for anything out of the ordinary. These include names or addresses that don’t belong to you, accounts you don’t recognize, and late or past-due payments that you know aren’t your fault. Seeing an error doesn’t always mean you are a victim of fraud. Sometimes, credit card companies make mistakes when reporting to the agencies.

Use the form at each of the reporting sites to file a formal dispute so they can correct it. If the error is a sign of criminal activity, let the agency know, and then try to obtain more information from the account issuer in question. It may be worth freezing your credit report, too, so no one can continue taking out credit in your name. When the issue is resolved, you can easily unfreeze it again.

Financial planning for seniors

Just like any other time of your life, you need to continue to monitor your finances and learn about new money tools and scams during your retirement. It’s more important than ever to have an idea of the dangers out there and what you can do if you experience a threat.

Many seniors have found it easier to have a loved one help them go through these money challenges, both to obtain advice and receive support when needed. This doesn’t mean you need to hand over control of your funds, but it does ensure that if you do need more help, your loved one is familiar enough with your money habits to follow your wishes.

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