While many people look forward to retirement, imagining a life of ease and freedom from the stress and strain of earning a living, this idyllic scenario is only possible if a person has carefully planned their retirement income many years earlier. Only those who have planned ahead get to enjoy their favorite hobbies and pastimes in their golden years. Only too often, many seniors spend most of their time worrying how to keep their health and wealth.
Finances are one of the biggest challenges facing retiring seniors. Although a senior may have saved for years to build their nest egg, this money can be quickly drained by medical expenses or emergency issues. Assisting elderly relatives with the financial aspects of retirement and aging can be a complicated process.
While there is no guarantee that an elderly relative will be able to have enough money after retirement, you can still help them avoid making costly mistakes and advise them on what steps to take to protect their assets.
Here are 10 tips to help an elderly relative manage their finances if they have not properly prepared for retirement:
1. Get some immediate income.
What can you do if a relative is experiencing money woes? One way to get immediate relief from their financial struggles is the option of getting a reverse mortgage if they own their own home. You’ll discover when you being learning about a reverse mortgage that it’s a financial agreement that allows a homeowner to relinquish the equity in their home in exchange for regular cash payments. This money can help supplement their retirement income.
2. Consider Medicare open enrolment.
You may want to help your relative with Medicare’s open enrollment option. According to a blog post for retirees on Medicare, Medicare Open Enrollment: Now Is the Time to “Shop Around”:
“Open enrolment” is defined differently by Medicare than you might recall from your days with employer-sponsored health coverage. In this case, it’s not the time to enroll in Medicare. Most people enroll in Medicare before their 65th birthdays. Instead, open enrolment is the time Medicare designates each year to make changes in coverage, such as leaving original Medicare (Parts A and B) and joining a Medicare Advantage plan, choosing a prescription drug plan or changing current coverage.
3. Write a will.
It can be awkward asking an elderly relative to write a will as this can be a sensitive topic. However, if they die without writing a will, the law will decide what happens to their assets. It decides who will benefit and how much they will receive regardless of the relationship your relative had with people when they were alive.
4. Work with expert financial advisor’s.
Unless you’re an accountant or know a great deal about finances, it’s always a good idea to work with a financial advisor. Managing money can be complicated and an expert can help you discover options that you didn’t even know existed for reducing expenses or increasing income.
5. Be vigilant about scams.
The elderly are often preyed upon by con men, who understand how eager seniors are to get financial relief. These con artists often present them with spurious business opportunities either by mail, a telephone call, or by visiting the house. Often these schemes are difficult to spot as they are presented in a highly plausible way to excite interest. In addition, financial exploitation may not come from a stranger but from a family member. It’s important that you learn how to stop scams and financial abuse and how to accurately report them to law enforcement.
6. Update financial paperwork.
You may have to see if the paperwork for social security benefits, pensions, stocks, bonds, and any other financial sources of income or assets are updated. It’s possible that forms have not been filled out properly or updated and that your relative is not receiving the benefits, income or dividends that they are eligible for.
7. Develop a short and long term financial plan.
Finances are never static because the value of money changes over time. Inflation affects purchasing power. Consequently, social security income, investments and other sources of income may have to be updated to keep pace with the rate of inflation.
8. Create a budget.
Without a budget, it’s easy to overspend. We are all surrounded by many tempting goods and services that satisfy our needs. Working with the constraints of a budget prevents someone from spending too much money too quickly.
9. Stay open to investment opportunities.
If your relative has an active portfolio in the financial markets, it’s important to keep an eye on investment opportunities. More money coming in will help offset any unexpected cost of living expenses.
10. Focus on preventative health care.
Medical expenses are one of the biggest challenges the elderly face. Fortunately, choosing healthy habits and make positive lifestyle choices can do much to improve health. Existing medical conditions can be mitigated and potential health problems avoided through the practice of healthy eating, exercise, and sufficient rest.
It can be initially challenging helping an elderly relative manage their finances, especially if they have neglected their financial well-being for a long time. However, with patience, kindness, and working with financial experts and the many resources available for the elderly, it can be rewarding to improve your elderly relatives financial situation.
