Financial Planning For Seniors – Getting Started!
Throughout one’s life, money consistently plays a large role in what we do, how we see things and situations, and how we feel. This is especially true during our senior years. Having good financial health is a large component to feeling comfortable and safe throughout retirement. In order to feel this way, we must first dive into the world of financial planning and come up with tactics that help develop the best retirement possible. With that said, this particular type of financial planning involves a lot of different steps and important things to remember. To help you get started, here’s a short summary of how to start the financial planning process for your senior years.
What is financial planning for seniors?
When it comes down to it, financial planning for seniors is a host of different topics all relating to the financial health of a person in their elderly years. Financial planning can range from deciding whether to rent or buy a home, sell off major high cost assets or to keep them, collect social security at one age versus another and so on. Due to the large amount of things to consider throughout the planning process, most seniors rely on the help of family members or a professional estate planner to make sure that each piece of the puzzle fits well.
The makeup of a good financial plan for seniors
To ensure that your finances are in good order and that you’re up to date with everything related to money, it is important to develop a strong financial plan that not only keeps everything in order, but that is easy to understand and watch over time. Some important aspects to every healthy plan are:
• An overview of each and every asset
• An overview of every debt, whether big or small
• An understanding of your current health insurance plan and what expenses are covered in it
• A monthly budget that is composed of both your income and your expenses, including small recurring expenses
• A budget that is comprised of larger expenses that are projected over a 3 to 5 year span
• A choice and arrangement with the person who will be in charge of both finances and other important decisions
Common financial mistakes seniors make
Because money is often an emotional topic, this type of planning makes it easy for a person to unknowingly make rash decisions that can often hurt them in the long run. Some
common financial mistakes are:
• Not having a proper short and long term plan
• Not avoiding the possibility of financial scams
• Turning to family members for financial advice instead of a certified advisor- It is true that in some cases, family members may be more helpful due to their
own background in financial planning, but in most cases it makes more sense to hire a certified planner with some relevant experience.
• Failing to include an adjustment for inflation in future financial needs and assessments of wealth
• Relying too much on Social Security income and not having an adequate savings
Though financial planning is a task in and of itself, it doesn’t have to be one that causes headaches throughout. With the proper amount of understanding from the beginning along with the help of a financial planner, a healthy retirement is within reach for most people.
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