Financial Planning Tips for Seniors
If you are a senior citizen, it can be difficult to figure out what your options are for financial planning. You may not have as much time or energy to make decisions about your finances because of age-related changes and health problems.
To help you get started, here are four tips that will give you some direction on the right path.
1. Optimize Your Benefits
Social Security benefits can be optimized by taking advantage of the years you have left. For instance, if you are at the point where your spouse has passed away or is no longer in a co-mingling relationship with you (meaning they do not live under the same roof), maximizing your Social Security benefit may allow for increased monthly payments.
If this applies to you and there is an age difference between each partner, then it might make sense for one party to receive their own individualized benefits on top of what they would get from social security through marriage. This way, both parties will need less income in retirement even if only one was receiving spousal benefits before splitting up.
2. Ensure That Your Estate Planning is Current
Estate planning is often neglected in the senior years, or even on a periodic basis. However, this can be very dangerous because you do not know what will happen to your estate if you become incapacitated.
You may want to consider appointing someone as an executor for your assets and providing advanced directives about life support decisions that need to be made should something happen
If it has been a while since you reviewed these documents, now might be the time to revisit them with an experienced attorney who specializes in elder law. They can help make sure everything is ready so there are no surprises later when things get complicated (e.g., around healthcare costs).
3. Review Your Investment Portfolio and Financial Plan
If you have investments, then it might also be time to review your portfolio and financial plan.
You may want to speak with a professional about how well diversified your assets are for retirement.
If there is an imbalance in the type of investment or risk profile that could increase your chances of running out of money later on during retirement, now would be the perfect time to change things up before you need them most.
4. Protect Yourself Against Fraud
Once we reach a certain age, it is very easy to become vulnerable and prey for fraud.
If you have any assets that are not in joint ownership with your spouse or kids, then consider one of the following options:
Place them into an irrevocable trust where only designated trustees can make decisions about spending or distributing the money.
Get a conservatorship from a court so someone else has legal authority over managing your finances.
Create a power of attorney document naming someone who will be able to act on your behalf if needed. However, this option may limit how much financial control you have during these difficult times while they are making decisions for you. Make sure there are no gaps between what you want to be done now.