It is common knowledge that America’s population is fast aging, and many are retiring. According to the Pew Research Center’s analysis of recent official labor force data, 50.3% of American adults aged at least 55 said they were no longer working due to retirement as of 2021’s third quarter. Money management is a crucial aspect of enjoying your retirement since you will experience several changes in your financial situation. Fortunately, there are numerous ways to stay on top of your finances in your golden years. Below are some of the best money management tips for older adults.
- Automate your finances
It isn’t uncommon for even the most organized individuals to miss a bill payment or two from time to time. Lack of money is the most popular reason for missed payments, but forgetting to pay the bill is more common than you think. Indeed, Nerdwallet surveyed 2,019 American adults for its 2018 Consumer Credit Card Report and discovered that 35% simply forgot to make the payments. Your ability to recollect multiple due dates will diminish with age, and the onset of vision loss and other challenges can also make staying on top of your bills even harder. Therefore, it is smarter to automate your finances as an older adult to avoid running into financial trouble due to forgetfulness. You can schedule deposits and withdrawals while escaping late fees and damaged credit. Also, you can schedule automatic and regular deposits into your savings account to sustain your savings habit.
- Set up a power of attorney
A power of attorney is another excellent step worth taking to manage your money as an older adult. It is a written legal document authorizing a trusted individual, say a family member or close friend, to act on your behalf if you become indisposed. This trusted individual would be in charge of your finances when you temporarily cannot do so due to a short-term reason, like incapacitation after an injury, fall, or other accident. It can also be a long-term arrangement if you have severe cognitive decline. The help of an estate attorney is invaluable in drawing up this essential document and addressing any power of attorney abuse.
- Reexamine your generosity
Many older adults are more than happy to assist family members with money. However, one of the harshest but practical tips for money management as an older adult is to set boundaries for your benevolence. You must prioritize your financial well-being before considering if and how you can assist others. This doesn’t mean that donations are off the table, but remember to do it with your interests in mind and healthy boundaries in place.
- Secure your medical expenses
According to HealthView Services, a 65-year-old couple in good health will reportedly require $387,644 to pay for healthcare costs for the rest of their lives. Your medical costs are perhaps the most significant expenses you have to contend with in old age, and unexpected health issues can destroy your budgeting overnight. Therefore, invest in proper health insurance to remain protected during old age. Also, it is prudent to set aside an emergency fund for health expenses if possible.
