Making the transition from paid employee to retiree can be difficult, and older adults need to plan ahead if they want to avoid serious money problems. With a good retirement plan, your senior loved one won’t have to worry about unexpected expenses or sudden illnesses. Here’s a close look at six financial planning tips that can help your loved one make the most of the golden years.
1. Build an Emergency Fund
Most financial experts agree that everyone should have a small fund ready for emergency expenses. Even if your loved one has excellent insurance and a decent income, he or she should still have cash readily available for an emergency. The emergency fund should be able to cover expenses such as repairing a burst pipe or renting a car. Most people can easily build an emergency fund in a matter of months by putting a little bit of money away every week.
Seniors may find it difficult to manage their own finances due to various health issues. If your senior loved one needs help managing an illness or assistance with daily tasks, make sure you choose a top-rated provider of at-home care. Home Care Assistance is here to help your loved one live a happier and healthier life in the golden years. From the mentally stimulating activities in our Cognitive Therapeutics Method to our friendly Care Managers who are available to answer your questions 24 hours a day, we offer a wide array of high-quality at-home care services.
2. Downsize
After retirement, your loved one will most likely be able to reduce the vast majority of his or her expenses. Instead of living in a large house with quite a few bedrooms, your loved one might want to sell his or her home and move to a smaller condo. In addition to having a bigger mortgage, a larger home will also cost more to maintain. Your loved one should also consider buying a reliable used car with cash. The insurance premiums for used cars are usually affordable, and your loved one won’t have to worry about making monthly payments to a lender.
Living independently is important for seniors who want to maintain a high quality of life. For some, this simply means receiving help with tasks that have become more challenging to manage over time. Even when families have the best intentions, they may not have the time to provide the care their elderly loved ones need and deserve. If your loved one needs help for a few hours a day or a few days a week, reach out to Home Care Assistance, a trusted provider of respite care Tucson seniors can depend on.
3. Create an Updated Budget Yearly
At the very least, your loved one should update his or her budget once a year. The budget should be a comprehensive financial plan that includes every expense, from health insurance premiums to entertainment. The best time to create a budget is just before paying state and federal taxes. Once the budget has been laid out, filing taxes will be much easier.
4. Delay Social Security if Possible
Some retirees don’t realize delaying social security payments can be incredibly lucrative. For every year your loved one delays social security, he or she is given an 8 percent boost in benefits. Those benefits will continue to climb until your loved one turns 70, and there’s no reason to hold off on social security past that age. By the time your loved one turns 70, his or her social security payments could increase by thousands of dollars a year.
5. Ask Around for Discounts
Seniors can save an immense amount of money by asking for discounts wherever they go. From restaurants to movie theaters, your loved one might save hundreds of dollars a month with those discounts. Your loved one should also ask about senior discounts on necessities like prescription medications and public transportation. Saving a few bucks here and there adds up over time.
6. Tackle Debt Immediately
Tackling high-interest debt should be a priority for anyone who’s getting ready to retire. No one wants to transition to a fixed income with unmanageable credit card or car loan payments. If your loved one can’t pay off the debt, he or she should consider consolidating it. Many financial organizations restructure clients’ debt for a flat fee.
Being a family caregiver may require managing your loved one’s finances and assisting him or her with a wide range of tasks. Families who need help caring for senior loved ones can turn to Home Care Assistance, a leading provider of Tucson elder care. Services available in our customizable care plans include meal prep, mental and social stimulation, assistance with personal hygiene tasks, and much more. We will work with you to create a customized home care plan that’s suited for your loved one’s unique needs. Call the Home Care Assistance team at (520) 276-6555 today.