Financial Planning for Seniors: Preserving Wealth in Later Life

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Financial planning is essential for young and old people. As we go through the stages of life, our income, expenses, and saving patterns also change especially at the beginning of our retirement. That’s why it’s important to financially be prepared so that we can be ready whatever the circumstances may bring.

Starting a financial plan can be a lot of work, and most of the time, you might not know where to start. That’s why in this article, I will share some valuable information to guide you through your planning. I also included several tips that might help your financial life stay secure and stable.

What to Consider in Planning Your Finances

To establish an effective financial plan upon your retirement, it’s important to set your plan wisely. To help you get started, here are some of the things you should consider:

Your Personal Goals

Identifying your personal financial goals can be a good start in making your financial plan. In doing so you should ask yourself some important questions:

  1. Am I happy with my current lifestyle?
  2. Do I want to have better financial stability?
  3. What do I want to leave behind for my children and grandchildren?
  4. What leisure or travel would I want to experience?
  5. Will I need to have care assistance?
  6. What other medical and health needs do I have?

Note: You can list down all the necessary goals you want to include in your financial plan. It’s also important to make sure that these goals are realistic and attainable.

Short-Term Plans

After listing down all your goals, it’s helpful to categorize these plans whether it’s short-term or long-term goals. Short-term goals refer to the things that you’ll pay for a short period, usually 5 years or below. Examples of short-term goals are buying a house or a car. It can also be paying for a travel or tour.

Long-Term Plans

This kind of financial goal is longer than short-term and usually occurs within more than 5 years. Most long-term plans include goals for your future like retirement plans, end-of-life insurance, or long-term health care.

According to various financial resources, some of the things to consider in planning long-term goals include:

  • Your expected life span - This is an essential aspect to keep in mind since we will never know how long we will live. Most seniors may think that they only have a few years remaining so they spend their savings too quickly, only ending up in a difficult situation. To keep you safe from financial problems in the future, it’s important to keep some extra savings with you.
  • Long-term care - Just like any other personal goal, allotting some money for possible long-term care is crucial. The senior years are the years of developmental decline, so it’s not impossible that you’ll get mobility or cognitive impairments when you get older.
  • Health care - Aside from impairments, seniors are also prone to getting chronic illnesses like stroke, diabetes, high blood pressure, or even cancer. Thus, it’s important to include healthcare savings in your financial goals.
  • Life insurance - This is an important safety net not just for you, but also for your loved ones and dependents. Though it may be unpleasant to think about the possibility of leaving behind your dependents, keeping an insurance plan is essential to keep you and your loved ones away from future financial problems.
  • Emergency savings - Aside from insurance, keeping some emergency savings can be helpful in coping with rainy days.
  • End-of-life insurance - This kind of insurance is also a practical way to not only save your loved ones from funeral expenses but also from the hassle of funeral preparations.

Income and Expenses

This is another vital aspect to consider in planning your finances. Start by identifying your income sources as well as your expenses. Next is to compare your monthly income against your fixed and estimated monthly expenses. Make sure that it includes all types of expenses like:

  • Fixed monthly expenses - This includes your monthly payments that don’t change such as insurance, mortgage, rent, or installments.
  • Periodic expenses - This is just like fixed monthly expenses. The only difference is that periodic expenses refer to annual payments like a renewal of a license or home, as well as property taxes among other things.
  • Flexible expenses - Unlike fixed and periodic expenses, flexible expenses refer to your regular expenses that don’t have a fixed amount. Good examples of flexible expenses are groceries, medicines, and other basic needs.
  • Discretionary expenses - Leisure activities, gifts, entertainment, charity, and donations are just some examples of discretionary expenses.

Note: Being aware of your income and expenses will help you evaluate if you can afford your financial goals or not. In this way, you can find another source of income or eliminate less important goals.

Getting Help in Financial Planning

Financial planning isn’t just a small thing it should be planned and thought about thoroughly. If you have confused about your current plan, it’s not a bad thing to ask for help. It’s also one way to make sure that you are financially secure when you get older. Try getting help from:

  1. Relatives/family members
  2. Financial professionals
  3. Government programs for the elderly

Safety Financial Tips to Consider

In financial planning, you also have to make sure all your savings, income, and insurance are secured. Here are valuable tips to consider:

  • Do it with a licensed financial advisor.
  • Use hard-to-guess passwords for your accounts.
  • Never share pins, passwords, or personal information with people you don’t trust.
  • Do not use a single account for all your finances.
  • Entrust your finances to a loved one you trust the most.
  • Regularly check credit reports.
  • Always review your financial decisions.
  • Be cautious of random people calling you on the phone as it may be scams.
  • Only dial numbers listed on your account information to make sure you’re calling the right source.

Final Thoughts

Once you finally got a grasp of your personal, short-term, and long-term goals, it will be easier for you to plan your finances. It’s also important to compare your income against your expenses to determine if you have enough income to compensate for your needs and wants.

Moreover, keeping in mind the safety financial tips can help you avoid being scammed and abused. With good financial planning, you’ll be sure that you’re financially secure in the near future.

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