Retiring involves making the transition between working and living a life of leisure. However, unless seniors use caution, spending their retirement funds may soon lead to financial crisis. There are several common mistakes retirees must avoid, but the following are the most common.
Lacking a Budget
Without establishing monthly budgets and monitoring spending habits, households can fall into trouble. Make sure you talk to your senior loved one and create a monthly budget he or she can maintain.
Planning for Unpredictable Expenses
While seniors may adhere to budgets, they often fail to plan for things like paying income taxes or covering the cost of car repairs or things that might need to be fixed around the home. These expenses are part of normal life, and money should be set aside for these situations.
Many older adults face challenges such as decreasing physical and mental health, so the costs of home care should be considered in financial planning decisions. There are a variety of age-related health conditions that can make it more challenging for seniors to live independently. However, many of the challenges they face can be easier to address if their families opt for professional senior home care. You can rely on expertly trained caregivers to keep your loved one safe and comfortable while aging in place.
Relying on Investment Returns
Seniors may base their projected monthly income on unrealistic expectations of receiving high returns on their investments. They then withdraw more money than they should. Surveys indicate 30 percent of retirees withdraw up to seven percent of their investment returns annually. This action isn’t advised without a backup plan.
Holding Risky Investments
Some see hanging on to risky investments as being cautious. If the investments are worth less than they cost, many seniors are reluctant to sell. If these types of investments take up too much of their portfolios, retirees are carrying excessive risk.
Being Too Generous
It’s not unusual for retirees to compromise their financial stability by giving money to charities or family members. Seniors must make their financial health a priority and avoid giving too much money away.
Saving money throughout their lives can help people enjoy their golden years without compromising their quality of life. If you have a senior loved one who needs help maintaining a high quality of life while aging in place, reach out to Home Care Assistance, a leading provider of home care Oshkosh families can rely on. All of our caregivers are bonded, licensed, and insured, there are no hidden fees, and we never ask our clients to sign long-term contracts.
Taking Social Security Benefits Early
To have income, seniors may be tempted to take social security as early as age 62. However, this action results in a 25 percent reduction in benefits. Retirees can collect full benefits at age 66. When seniors wait until the age of 70, benefits rise 32 percent.
Accepting Bad Advice
While family and friends may believe they have a senior’s best interests at heart, they don’t have all the information necessary to make the best financial decisions. Retirees are better off by consulting with certified financial planners or registered investment advisors to get their affairs in order.
Smart financial planning is just one of the many things that can enable seniors to age in place gracefully. Some seniors need occasional assistance at home, and oftentimes the family members who take care of them need time away to run errands, take a nap, go to work, or take a vacation. Oshkosh respite care experts from Home Care Assistance are available on an as-needed basis, giving your family peace of mind that your loved one will remain safe and comfortable while you relax or focus on other important responsibilities. Schedule a free in-home consultation by giving us a call today at (920) 573-6295.