Personal Finance

Financial Challenges Seniors Face

While retirement and old age should be a time of relaxation after years of hard work, some seniors do not get to enjoy their retirement because of financial concerns. Whether this is due to late retirement planning or misunderstanding how retirement benefits work, financial worries can put a major damper on retirement joy.

Low Interest Rates
Retirement interest rates are staying lower longer because more people are saving money and not spending it. While this is good personal finance, it does affect financial interest rates. Bank of England experts suggest that economic recovery could sag due to the need to save for longer life expectancy. Not only does this cause potential problems for building your retirement investment, it also affects the loan eligibility of middle-aged individuals, who bankers fear will not have enough money to pay back the loan over time.

Health Care Costs
One unfortunate truth about aging is that health expenses go up. Between medications and routine visits, the cost of healthcare can skyrocket for the elderly. The government does provide some assistance with health care, but it would be beneficial for you to stockpile and emergency fund to cover unexpected medical costs.

If you have life insurance and/or health insurance, you may qualify for money for a disability. Talk to your insurance provider to see if you qualify for the funds. This can help you offset the cost of medical expenses.

Every year, more retirees are leaving their jobs with a mortgage or consumer debt hanging over their head. Despite no longer having a steady stream of income, many seniors still have student loan debt too! In addition, many seniors feel obligated to help their children pay their bills. You can alleviate these financial difficulties by paying off debt as quickly as possible and making sure your children know that you cannot help them with all (or even some) of their bills.

Wills and Estate Issues
If you have not already prepared a will and organised your estate, now would be a good time to start. You should have a clear will written, signed, notarized and stored in your records. While you are preparing your will and trust, you may want to consider appointing a trusted family member with power of attorney. Now would also be a good time to consider a living will, which tells your family what you want to happen should you need life support.

Money management
Aging parents often struggle with money management. Age related illnesses often make it difficult to remember to pay bills. If you assign a power of attorney, they can pay your bills and access your accounts.

New technology makes it much easier to keep track of your money. Install a simple program on your computer of access an internet-based money-tracking program to make your monthly budget easier. You may also want to consider setting your payments on auto pay so that you do not have to remember to send in a check every month.

Keep at least one month’s worth of expenses in your bank account to prevent overdrafts and offer a cushion for the months you have unexpected expenses.

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