Financial Tips for Seniors

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Decide if you need financial help from an expert, and then choose wisely.

  • A financial advisor could help answer questions such as how quickly to take money from savings and how to invest in your later years.
  • Do research on the expert’s job title and their background.

Prepare for the possibility that you may become unable to handle your finances.

  • Consider writing down a list of your financial institutions and account numbers and keeping it in a safe place that would be accessible by your loved ones in an emergency.
  • An attorney can help you decide if you should have a legal document known as a power of attorney (POA), which would allow one or more people you designate to make key decisions with as much or as little of your financial or personal life as you choose.
  • You can also add a co-owner to a deposit account.
    • Co-owner as has the ability to conduct transactions, including withdrawing money, without your prior approval.
      • Your banker or attorney may be able to help you identify other possible alternatives, but you still must think carefully about who you give access to your money.
      • Also, if your co-owner owes a debt and cannot pay it, the funds in your account may be taken to pay the debt.

Develop a spending plan for your retirement.

  • Having a plan for your money and limiting expenses in retirement is important.
    • Consider continuing to put some of your income into savings, especially for short-term goals such as holiday gifts.
      • That can help you avoid a large, sudden withdrawal from your retirement investments.

Consider limiting the mail and phone calls you receive from marketers.

  • Unsolicited offers from unfamiliar companies can result in you overspending your budget or paying for shoddy merchandise or service from vendors who don’t stand behind their products.
    • Consider being added to the national Do Not Call Registry (call 1-888-382-1222 or visit www.donotcall.gov).

Review your credit reports

  • Mistakes or other errors on your credit reports could make it more costly for you to buy insurance or borrow money.
  • Monitoring your credit reports is also a way to detect identity theft.

Think twice before accepting an offer to “advance” (lend) you a portion of your future pension, Social Security or other retirement income.

  • These offers are similar to payday loans and they likely involve costly fees and interest.
  • You can also find yourself taking out similar loans in the future — paying additional fees and interest charges — to make up for new cash shortages as you repay the original loan.

Use credit cards cautiously.

  • Before making purchases using your credit card, consider whether you will be able to pay your balance in full when the statement arrives, so you will avoid costly interest charges.

Remember that a reverse mortgage will eventually have to be paid back — with interest.

  • Reverse mortgages allow homeowners age 62 or older to borrow against the equity in their homes without having to make monthly payments as long as they meet the terms of their loan agreement, such as staying current on property taxes.
    • However, the money borrowed plus interest must eventually be repaid, usually when you or your heirs sell the house.
    • If you do get a reverse mortgage and you live in the home with your spouse, some suggest that both of you sign the reverse mortgage agreement to ensure that the surviving spouse can continue to live in the home if one dies before the other.

Earn some extra money.

  • Turn a hobby or another interest into a part-time job.
  • Other possibilities include a seasonal job or freelance consulting.
  • However, determine if this extra money could affect other aspects of your finances tied to your income.
    • Such as a potential increase in your Medicare costs or a possible temporary reduction in your Social Security benefits.
    • You should also consider any income tax implications.

Know if you’ve agreed to let your bank cover certain overdrafts.

  • A way to avoid overdrafts is to keep tabs on your account balance before using your debit card or writing a check.
  • You can ask your bank to link your checking account to your savings account to cover any overdrafts, perhaps for a small fee.

Make it easier to manage your money and pay the bills.

  • If you’ve accumulated multiple bank and investment accounts and credit cards over the years, consider whether you can close some you no longer use or need.

Consider additional ways to save time and money.

  • Your bank and the companies you do business with will likely have alternatives for you to pay your bills electronically.
    • Options can include online banking bill payments or allowing payments to be automatically transferred from your account.
    • Making scheduled payments automatically can also help avoid late charges or service interruptions.
  • Be cautious about going paperless if you aren’t tech savvy or comfortable going online to review your statements.

Organize and protect your important documents.

  • Items to keep at home in a secure place that’s easy for you to get to:
    • Your bank and brokerage statements
    •  Insurance policies
    • Social Security and company pension records
    • Other personal and financial papers you or your family might need on short notice.
  • If caregivers or others regularly visit you, make sure that your checkbook, credit cards and other financial records are protected.
  • A safe deposit box is best for storing documents or valuables that could be difficult or impossible to replace and that you probably won’t need access when a bank is closed.
    • Safe Deposit box may not be the best place for an original of a will or power of attorney.
      • It may not be possible for your loved ones to access them quickly if you become incapacitated or pass away.
  • Keep important documents seal in airtight and waterproof plastic bags or containers to prevent water damage.
  • In case of a natural disaster, you may want to prepare a emergency evacuation bags with essential financial items and documents.