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Guide to Aging on a Financial Budget
Updated on: October 2022
It is important for you to use your retirement nest egg wisely so that you do not run out. People are living for longer now than in previous years, which means that you need to be disciplined in your spending. In This article, we explore the different ways to ensure your financial plan guarantees security while still enjoying your hay day.
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Explore Different Ways to Ensure Your Financial Plan and Guide to Aging Comfortably
While financial decision-making and budgeting are imperative to ensuring your financial plan for your retirement and potential long-term care is important, doing so is often ignored until it is too late. According to Tracy Ann Miller of Red River Advisors a staggering 65 percent Americans do not keep a budget. According to Woman’s Day Magazine, a budget will show you where your money is going every month and allow you to change the course if you need to.
Maintaining good health as an older adult will keep you away from the hospital and long-term care, saving you thousands in health care costs. According to the Center for Disease Control and Surveillance (CDC), the primary drivers of high health costs are chronic diseases such as heart disease and diabetes. Eat a nutritious low-fat, high-fiber diet, exercise often, and avoid stressful situations.
Consider a Medical Improvement Plan
As the years go by, the one thing that has stayed constant is the increasing health care and medical expenses. One way to combat this is to get a Medicare Improved Plan. Do some research and see what works best for you. The good news is that for the various types of improved plans, many of them do not involve increased out of pocket for the client. These plans can save you costs in the event of a medical emergency like a heart attack, a chronic illness like diabetes, or even other serious conditions.
Shop for New Medicare Coverage
It is wrong to assume that last years’ cover is still the one that suits you best. With health reforms, changes occur that alter Medicare policies and prices.
Try One Shopping Trip a Week
This reduces your chances of buying things impulsively while also reducing fuel expenses.
Bargain for Lower Interest Rates
Do not shy away from bargaining an getting the best deal, whether it is an item at a garage sale or clearing a debt, your goal should be to get the best deal.
Buddy Up on Groceries
It is cheaper when you shop in bulk; therefore, spend some time every week with your friend or neighbor creating a shopping list for the week. You will be able to socialize with them in the process while also getting cheaper deals on groceries. Once you have bought the groceries, you can split them amongst yourselves.
Pay Annually if You Can
Insurance companies will give you the option of paying the premiums monthly, quarterly, or annually. It is advisable to pay annually as this is always cheaper. It saves you from paying monthly administration fees.
Buddy Up on Travel
Traveling, especially for vacations, is cheaper when you do it with a friend. You can share a room instead of having one lonely expensive one. It is also more fun to travel with friends.
Don’t Buy Movies and Books
Instead of buying books and movies, why not visit the local library. This is a great opportunity for you to get out of the house and probably run into an old friend or make a new one. You will also save money. Find out if your library loans eBooks digitally and continue to expand your mind without spending much. You can also borrow your favorite movie and watch it as you unwind in the evening.
Unplug Unused Devices
Only plug in devices while you are using them and unplug them while you are not. Leaving them plugged in affects your electricity bill. You will notice changes in your next bill when you practice this religiously.
Turn off heat to unused rooms, and this will also definitely save you money.
Take Advantage of Senior Discounts
Do not afraid to ask about senior discounts while you are out shopping or having a meal. Many companies have them but they do not always advertise. There are around 100 restaurants, grocery stores, and retail chains that offer discounts to seniors this is according to the senior list.
- Every first Tuesday of the month Belk offers a 15 percent discount to seniors
- On every first Wednesday of the month, Rite Aid offers a 20 percent discount
- At Chick-Fil-A, you get a 10 percent discount or a free drink
Senior discounts are not only limited to big chains; they are also given by local businesses and small companies. Some offer them to people who are as young as 55 years of age. Over time these discounts can add up to a lot. Always take advantage.
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The American Association of Retired Persons (AARP) membership is $12 annually. You can join it as early as when you get to 50 years of age. AARP members get discounts from many businesses that are not available to the public. These include travel discounts on flights, hotels, and cruise ship.
In addition, as an AARP member, you are entitled to free webinars on important topics such as social security and Medicare to keep you informed, free tax help and many other resources.
Don’t Rush Your Social Security Benefits
Another trick is to make the best of your social security benefits by postponing them. This grows your total benefits.
Have Adequate Insurance
Take time to do ample research and see what insurance policy works best for your specific needs. Do not be pressured to buy a policy by an overly friendly salesman instead take your time. You can also enlist the services of an independent insurance agent before you make a decision. Independent agents work for you and not the insurance company and hence will advise you correctly due to their wealth of knowledge.
Get a premium that allows you to cash your death benefits in case of an emergency like an illness or when you run out of your 401(k). Accelerated benefits may come in handy when you ran out of your nest egg.
Do Not be Too Generous With Your Money
While you may have assisted your friends, relatives, and adult children in the past, now is the time to focus completely on your financial independence. You may end up giving out too much and running out causing you to suffer. Therefore, you must strike a balance. While saying no to your adult kids may be difficult, make them understand that you love them but that you require them to be more independent.
Beware of Friendly Strangers
Seniors are more at risk of financial fraud than other people. Put measures in place to safeguard your money. For example, you can have a system where the system alerts your adult children when someone attempts to withdraw a huge amount of money from your account. You can also have a debit card that only works in selected locations. The following are signs you should look out for.
- A pitch that does not make sense or sounds too good to be true. Talk that is complex and confusing. In many cases, you will find that neither you nor your younger daughter or son will understand.
- The person will put pressure on you to sign the contract or form immediately without allowing for careful review.
- The person will usually be overly friendly, coming to see you often an inviting you for lunch over and over again.
- The document will have no paper trail that can link hit back to them.
Be Financially Literate and Keep Learning
It is important to exercise your brain by learning constantly. Research shows that seniors who have high financial literacy levels are likely to be wealthier. Follow up on the stock market and understand investment risks then see how you can tap into that.
Slow Decision Making
Financial advisor Allan Roth speaks against rushing into financial decisions. He advises that you take your time and think about it for some time, create a list of advantages and disadvantages and weigh them against each other. Discuss this major decision with other people who you trust and research widely on the topic.
Why Stop Working
According to research on by the Bureau of Labor Statistics, it’s expected that 13 million Americans age 65 will still be working in 2024. Working as a senior has many benefits. It keeps you connected to the real world through daily interaction with clients and co-workers, you make more money to support you, you retain a sense of joy and purpose. You do not have to work at your previous job, you can start a small business to supplement your savings and retirement benefits. If you like to bake, you can make cakes for weddings and birthdays, if you like knitting you can make scarves or sweaters to sell online. This way you do what you love while still making money.