The past two years have been difficult in many ways to many Americans, including our senior population. Economic struggles due to the pandemic aren't the only financial challenges facing the 65+ community today. While aging may bring wisdom, retirement, and discounts, there are a host of money-related issues that can accompany older adults such as rising healthcare costs, debt, running out of money, being a victim of fraud, changing financial circumstances, and paying for senior living. Below we discuss each of these six challenges and what you can do about them.
Rising Healthcare Costs
Today, healthcare seems to be a financial challenge for many. Unfortunately, as you age, chronic health issues may worsenWith those complications maycome more frequent visits to doctors and increased prescriptions. If you're retired, your financial standing has likely changed since you stopped working full-time. Living on a fixed income and trying to keep up with healthcare costs can be tricky.
What you can do: Take preventative steps and find out if you're eligible for healthcare assistance. Some preventative measures include eating a balanced diet, engaging in regular exercise appropriate for your physical ability, and having regular checkups and screenings with your primary physician, dentists, eye doctor, and any specialists you require. As for healthcare assistance, you'll need to do some research on the programs that are available. Some are income based, have age restrictions, or depend on your location. If you're married or have adult children, discuss it with your loved ones to ensure you are making the best decision.
Debt
Today, the average American has accumulated $90,460 in debt. Thankfully, baby boomers and the silent generation have the least amount of debt of today's population. Still, some seniors may carry their debt into retirement. The source of such debt can stem from helping children financially with education or weddings costs, among an array of other expenses. Every parent wants to be able to help their children in any way they can, but the financial burden can be damaging long-term. It's important to have a plan in place for paying off the debt ahead of time, but even the best laid plans can sometimes go awry.
What you can do: If you find yourself in debt during your golden years, don't worry - there are ways to remedy the situation. One way to do so is by consolidating your debt through a personal loan. This will lump all your debt together and give you one interest rate and debtor to pay. Before you decide to go this route, do your research, and discuss all your options with a financial advisor.
Running Out of Money
It happens. Sometimes seniors run out of funds, whether it's because of poor money management, having a hard time adjusting to a fixed income, or unexpected expenses. For seniors who are retired, the typical sources of income include: social security, pensions, and retirement plans.
What you can do: There are several measures you can take to avoid running out of money, including reducing spending, consulting a financial advisor, picking up a part-time job, or selling real estate. Prior to retiring, it's wise to start getting used to living on less. Determine what you really need and what you can let go of to aid in minimizing your spending. You can also meet with a financial planner or advisor to seek out guidance for making your money last. If you find that you're already on the verge of running out of funds, you may need to take on a part-time job you'll enjoy. If you like gardening, maybe working in a nursery would be the best fit for you. Last but not least, remember most people's money is tied up in their homes, so selling your house or other owned properties may be financially prudent.
Fraud
Seniors are often targeted by scammers. Why? Well, the masterminds behind these schemes often assume that the elderly don't have their wits about them. They may take advantage of common trends in the 65+ community such as memory loss or confusion. In the unfortunate event that an older person falls victim to one of these scams, it can result in the loss of hundreds or even thousands of dollars.
What you can do: Never give out personal information over the phone, email, text, unsecured websites, or through mail. No matter what the person on the receiving end promises or threatens, do not give in. If you feel unsure about the validity of the correspondence and want to pursue it further, reach out to the official company, financial institution, or organization the person claims to be representing. This will help you determine whether the representative was genuine or not. If you're an adult child of a senor with a medical condition impacting their memory or comprehension, advise them not to answer calls from unknown numbers and consider installing a spam blocking app on their mobile device.
Changing Financial Circumstances
As we mentioned, aging brings changes to financial circumstances in a variety of ways. In addition to living on a fixed income, there are other financially impactful situations that may arise, including the death of a spouse. How can this impact the surviving partner? Additional income may be lost depending on the source, and if the deceased spouse handled most financial matters, the living partner may feel at a loss when it comes to taking over such responsibilities.
What you can do: Take the time now to plan ahead with a lawyer. This may involve writing up a will that outlines how assets should be distributed. Don't rush through the process of creating a will. You want everything to be accurate and according to each of your wishes. In addition, it might be wise to invest in life insurance. If you choose to pursue life insurance, each spouse should assign the other as their beneficiary, allowing the living partner to receive the money following the death of the other.
Paying for Senior Living
Whether you're planning to age at home or move into a senior living community, financing your golden years can be daunting. With so many options available today, it may be overwhelming to choose the right fit for you. If you're planning to age at home, you have to consider what home improvements are required to keep you safe and sound. Alternatively, if you're planning to move into a senior living community, you will need to determine how to afford the associated costs. There's no right or wrong answer - it depends entirely on your personal circumstances.
What you can do: Regardless of what you decide, there are two things everyone should do. First, decide which option is best for you beyond just the financial component. Second, figure out what you can afford. If you think a senior living community would be best, you can use our cost calculator to determine financial feasibility. For those interested in aging at home, carefully inspect your home with your spouse, adult children, or a trusted friend to determine what changes are necessary. Figure out what you can do on your own, then seek a contractor for an estimate.
Financial challenges befall us all, but no one wants to spend their senior years worrying about money. With the knowledge of what you can expect, you can work to combat any financial struggles that may come your way.
To get a better picture of your current financial situation, visit our cost calculator.