Throughout their lifetime, people will save money for their lives before, during, and after retirement. Having funds stowed away for future needs and wants is an important and smart choice, but it doesn’t end once loved ones hit their senior years. Family members must manage their money throughout their lives. Here are four common mistakes this group should avoid when doing just that:
1. Handling Finances Independently
If seniors have taken care of themselves for many of their lives, it can be challenging to relinquish control. Yet, handling their finances all on their own is an intricate process. Every loved one is different in their knowledge of money management. According to the Federal Deposit Insurance Corporation, a financial expert may be a good person to bring on board for those family members who struggle to manage their savings.
These partners can advise seniors on their investments and finances, especially concerning future medical and healthcare needs. Just be sure that these aides have the necessary credentials to give the best insight possible.
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“Loved ones need to educate seniors about scams.”
2. Answering Solicitation Emails
We all get them. Random messages appear in our email inbox or spam folder, asking for money or claiming to be an unknown relative needing financial assistance. While some people may know better than to reply, seniors may not be as knowledgeable. Having grown up when the internet and email didn’t exist, family members may be more trustworthy and willing to help someone in need.
Loved ones need to educate seniors about these scams. Setting up filters to keep these messages away from seniors’ hands—and wallets—is a good idea. Family members should be sure their parents, aunts, and uncles know they can discuss these emails at any time to ensure seniors aren’t taken advantage of.
3. Relying on Federal Aid
There’s a common misconception about senior healthcare that Medicare will cover these expenses. That’s not the case. Instead, most of these costs will likely be handled out of pocket by older loved ones and their families. Medicaid will kick in, but only when people’s income and finances reach a certain point—usually under a specific, government-mandated threshold.
Seniors shouldn’t rely on federal aid for assistance with their healthcare costs. They’ll need to maintain their savings and ensure they have the finances they’ll need for their future medical needs.
4. Spending Without a Budget
Once people hit retirement, losing track of their expenses is easy. This is a slippery slope, however. According to Forbes, it’s critical for loved ones to have a good idea of where their money goes on a regular basis, whether those are frequent costs or not. There are several ways to spend funds appropriately without letting this habit get out of hand.
As previously mentioned, the first is to work with a financial advisor who can provide the insight necessary to use money wisely. For seniors who don’t want – or feel they don’t need – additional help, a spreadsheet can assist in tracking their funds. Utilizing these tools and resources can aid loved ones in managing their money to the best of their ability.
Keeping track of one’s funds is a lifetime responsibility. While it isn’t the most fun exercise seniors will engage in, it is one of the most important. Managing their expenses will help family members cover some of their most crucial costs, including improving their overall quality of life. By being mindful of the abovementioned mistakes, seniors can live comfortably without headaches.
