Tips for Managing Your Money in Old Age
The sooner you start getting serious with your money, the easier it will be to manage your finances during your golden years.
Retirement is a time that’s meant to be enjoyed, not stressed over. But if you’re not managing your money properly, the odds of that stress-free retirement coming to pass are pretty low.
In fact, if you don’t have enough money saved up to supplement your Social Security checks, your retirement years could end up missing one crucial thing: retirement.
That’s not what you want, which is why we reached out to some financial and elder care experts for their advice on managing your money in old age. The sooner you start following these helpful tips, the more comfortable your retirement will be!
Build a budget.
In order to enjoy your golden years, you’re going to need money, and the only way you’re going to have that money is if you save it. That means creating (and sticking to) a budget.
“You should start planning as soon as you feel your future retirement is in jeopardy,” offered Holly Peterson, owner of Elite Retirement Strategies in Pocatello, Idaho. “If you don’t track your spending, you can’t get control of your savings.”
“Work to create a budget to see how much you need to save in order to retire,” she said. “Creating and sticking with a budget is one of the most essential parts of saving money.”
If you’re at a bit a loss for how to do that, don’t fret. We have a handy guide for budgeting beginners, complete with a free downloadable spreadsheet that you can use to build a budget of your very own!
Be prepared to ask for help.
There are lots of people who feel uncomfortable asking for help; but as you age, the odds increase that you’re going to require some assistance—especially with your money. The sooner you make peace with that—and plan accordingly—the better.
“As a senior, there may come a time when you want someone you trust to help you manage your money.” Susanna Williams, a consultant for Hospice of South Louisiana. “Consider keeping a list of all of your financial institutes and accounts and keep it locked in a safe place only accessible by your loved ones if there’s an emergency.”
“An attorney can help you decide if you need a document called a ‘Power of Attorney’ which allows other people that you specifically designate to make key decisions over your finances,” she continued.
“This can keep you feeling secure with your finances in case of any illnesses or other emergencies that make you unable to manage to your finances yourself.”
Think about where you’ll retire.
“Housing costs comprise the largest, single monthly expense for many Americans,” explained Drew Kellerman, founder of Phase 2 Wealth Advisors in Gig Harbor, Washington. As such, he had a couple of different recommendations for how you can keep your housing costs down in retirement.
“One way to make ends meet on Social Security is to consider moving in with extended family,” he said. “This arrangement can be in exchange for sharing some of the housing expenses, helping with the chores, watching the grandkids on a regular basis, etc.”
But if that’s not a good option, Kellerman suggested that you might want to reconsider where, exactly, you’re planning to retire.
“Another comprehensive way to stretch your dollar is to live in a place with a lower cost of living,” he said. “Here in the U.S., it costs far more to live in the most densely populated, coastal city areas than it does in many other parts of our nation.”
And Kellerman even suggested that you could consider retiring abroad:
“Many retirees who would barely get by on their modest income here in the U.S.A. have found that they can live at least a middle-class lifestyle on Social Security alone, depending on where they choose to live.”
“This is not a decision to be taken lightly, as there are many factors that should be considered,” he cautioned. “If living abroad in retirement is appealing, we recommend conducting thorough research and ‘test trips before making the big move.”
Earn some extra income.
One of the issues that many people struggle with post-retirement is boredom: They simply don’t have enough to do! Meanwhile, many others don’t have quite enough money saved up to live the kind of lifestyle they would like to.
Two birds, meet one stone: You can get a side gig to add structure to your day and to help you earn some extra money after you’ve retired.
“In the current gig economy, there are many ways for people to earn extra money on top of a traditional income,” said Peterson. “Seniors even have the ability to choose gigs that match personal interests, like becoming a babysitter, dog walker, or driving for Uber.
And even if you haven’t retired yet, that doesn’t mean that some extra cash here or there won’t do you good. In fact, Peterson recommends funneling that additional income directly into a retirement account.
Right now is also perfect time to look for extra work. “With the economy nearing full employment, there are likely many part-time job opportunities in your area,” said Kellerman. “Earning a few hundred dollars per month to supplement Social Security can make a huge difference for someone on a very tight budget.”
Worried about that extra income creating some problems with your Social Security benefits? You can relax. “Even if you have not yet attained ‘full retirement age’ you can earn more than $1,300 per month without ‘losing’ any of your Social Security,” Kellerman clarified.
Depending on your situation, you might be able to earn extra income from a slightly more passive source:
“Many retirees who own their own home don’t want to leave but can’t really afford to stay,” said Kellerman. “Does your home have extra rooms not in use? Consider leasing a room or two to carefully selected renters. Or, if you’re ambitious, investigate taking in short-term vacation renters through programs such as Airbnb. Both options can generate additional cash flow.”
Look for senior discounts and deals.
You’re probably well aware that senior discounts can help you stretch your budget further. But did you know that you could also get a senior discount on financial services?
“When you hit a certain age, some financial institutions offer breaks on services,” said Williams. “Make sure to comparison shop with your bank. Don’t just settle for one if others will offer you deals as a senior that can help you hold onto more of your saved finances.”
“If you like your bank, let them know the offers that you have seen through other banks and see if they’ll give you the same senior discounts,” she added.
And in the meantime, you should be taking advantage of any and all senior discounts you can find. For more information on possible deals in your area, check out our blog post on 40 places that offer great senior discounts.
Research senior benefit and aid programs.
Beyond just shopping around for senior discounts and making sure you ask for help with your finances, you should also be taking full advantage of the numerous government benefit and senior aid programs that this country has to offer.
“Did you know there are over 2,500 benefit programs nationwide that can help ‘lower income’ seniors with expenses related to housing, medication, healthcare, taxes, etc.?” said Kellerman. “The catch? Searching for, sifting through and sorting out which benefit programs are available to you can be daunting.”
Luckily, this isn’t something you will have to handle entirely on your own. “The National Council for Aging has created a fabulous non-profit website that makes it super easy to find out which of these programs you may be eligible for: www.BenefitsCheckup.org,” he said.
According to Kellerman, that site can assist you with “public assistance programs that can offset the costs of medication, health care, food and nutrition, housing and utilities, as well as provide income assistance, help for veterans, employment assistance and more.”
Peterson suggested two federal programs that can be particularly helpful:
- “Supplemental Security Income: This federally funded income supplement program is designed to help older people with little to no income who suffer from disabilities like blindness or even diabetes. Eligible recipients are given cash for their basic needs like housing, food or other necessities. SSI is a great program to help protect vulnerable seniors who have extra expenses due to their disabilities.”
- “Extra Help with Medicare Prescription Drug Plan Costs: The Extra Help program is available to qualifying seniors who are already using Medicare. This program helps pay for monthly premiums, annual deductibles, and drug co-payments. In total, the program is estimated to be worth about $4,000 a year. Extra Help is a great way for seniors to make sure they’re still able to get important medication without worrying about costs.”
The earlier you start getting serious with your money, the easier it will be to manage those funds throughout your golden years. Start now, and reap the benefits later. To learn more about managing your finances, check out these other posts and articles from OppLoans:
- Save More Money with These 40 Expert Tips
- 8 Good Habits to Get Your Finances—and Your Life—on Track
- Your Guide to Escaping a Debt Trap
- How to Responsibly Maximize Your Credit Card Rewards
|Drew Kellerman is the founder of Phase 2 Wealth Advisors in Gig Harbor, Washington.|
|Holly Peterson is the owner of Elite Retirement Strategies in Twin Falls, Idaho.|
|Susanna Williams is a consultant for Hospice of South Louisiana, a hospice that provides a holistic approach to symptom management and support for elderly patients and their families. Hospice of South Louisiana has been awarded Reader’s Choice Award for Hospice and received a top ranking of 100% compliance by Medicare.|