Main Menu

Top Ten Mistakes Seniors Make With Their Finances

We are all bad with our finances at one time or another in our lives. We have all made mistakes with money, but some errors have a greater impact on our lives at different ages. Below are a ten mistakes that older investors and savers tend to make…

There is a need to avoid some mistakes when you are leaning what is payday loan consolidation.  The avoidance of the mistakes is essential for the following of the correct procedure for the consolidation of the debt money. There is meeting of the needs and requirements.

  • Underestimating Your Life Expectancy. The good news is we are living longer than ever. The bad news is our money now has to stretch twenty, possibly thirty years in retirement. According to the National Center for Health Statistics, the average life expectancy in America is 77.8 years. Be sure to take this, as well as family history into consideration when planning distributions from your retirement accounts.

  • Underestimating Health Care Costs. Health care expenditures are rising almost twice as fast as inflation. The National Coalition on Health Care reports that in 2005 health care rose 6.9% and the average cost for health care per person was around $6,700. Pair rising health care costs with rising life expectancy and you see the danger many seniors are facing.
  • Not Having An Updated Will. Married, single, grown kids, no kids, it doesn’t matter…everyone needs a will. If you die without a will, the court will decide how to distribute your assets. It’s likely the court won’t distribute them the way you wanted. For example, the court will not distribute assets to friends or charity, though that may be your intention.
  • Having An Outdated Estate Plan. The objective of a good estate plan is to transfer the property you want, to the people you want, in the most tax efficient manner. This includes much more than simply having a will. If it has been awhile since you last reviewed your estate plan, or if you don’t have one in place, now might be the time to meet with an estate planning specialist.
  • Getting The Wrong Advice. When you turn 55, your mailbox gets flooded with financial professionals sending you all sorts of information. While “Free Dinner at Ruth’s Chris!” might get your attention, be careful from whom you get your advice. Educate yourself on financial topics that affect you, or take a long a family member when meeting with a financial professional for the first time.
  • Focusing On The Wrong Goals. Unless you have enough savings to cover all your retirement years (including rising health care and nursing home costs) retirement should be your number one goal. Paying for a child or grandchild’s education, adding on to your home, or helping out family members should all be secondary. Your child or grandchild can get a loan for school…you can’t get a loan for retirement.

  • Underestimating The Impact of Inflation. Seniors tend to be more conservative in their investment options because retirement is so near. The real risk to your retirement, however, could be running out of money. If your fixed income portfolio is yielding 4% a year and inflation is at 3%, your real return is only 1%. You must find a balance of both bonds and equities that fit your risk tolerance level and also provides you with enough income.
  • Not Taking Advantage Of Senior Discounts. We all know about the usual senior discounts to movies and restaurants. But there are more to take advantage of. AARP offers discounts on gym memberships, hotels, airlines, prescriptions, internet services, Home Depot, and more. You can check out discounts specific to your area at www.seniordiscounts.com
  • Misunderstanding Medicare. Many seniors think Medicare will pay for long term care…it won’t. Medicare will not cover custodial care, or care for help with daily activities such as eating, bathing, dressing. Medicaid will pay for some of these expenses, however only certain people are eligible for Medicaid. For those who don’t qualify, private long term care insurance could be an alternative.
  • Making Important Decisions At The Wrong Time. Your death bed is not the time to write a will. When a spouse dies is not the time to find a financial advisor you trust. Thinking about a Power of Attorney shouldn’t wait until you are incapacitated. Proper planning will ensure you are not rushed to make important decisions during an emotional time period.





Leave a Reply

Your email address will not be published. Required fields are marked *