Retirement is a golden milestone for many senior citizens, and you deserve to enjoy it worry-free. However, maintaining financial fitness on a fixed income can quickly put a damper on things. With inflation ever increasing and the prices of food, gas, and more continuing to rise, the idea of no more raises or bonuses can be anxiety-inducing for even the most well-off seniors. Thankfully, with a few simple steps to ensure your financial fitness, you’ll be able to relax and spend your retirement without constantly worrying about money. In this blog post, we’ll explore key strategies and financial tips for senior citizens to maintain their financial health and enjoy a prosperous retirement.
Track Your Expenses
Whether you’re already retired or are planning to retire soon, chances are your financial priorities have changed since the last time you set a budget. Budgeting is one of our best financial tips for senior citizens. It’s time to re-allocate your funds in a way that’s consistent with your current lifestyle and values.
First of all, get an idea of your current financial situation. What is your monthly income? Consider the net income you receive from your current job, Social Security benefits, retirement account payouts, investment accounts, or any combination of these. If you haven’t retired yet, you’ll need to get an idea of what your income will be after retirement before you create your budget.
Next, you’ll need to figure your current expenses. If you use credit cards or debit cards, you can easily find this out with apps or websites like Mint. They’ll automatically track and categorize your spending. Some credit cards will also do this for you through their app or website. If you prefer to use cash or checks, you’ll need to do a little more leg work. Spend the next calendar month writing down each of your expenses on an expense tracker. You can use a spreadsheet or simply a piece of paper to record the date, item, category, and price of each expense. Make sure to include bills, subscriptions, insurance, and tax payments.
Make a Budget
Once you know where your money is going each month, it’s time to crunch the numbers. Are you spending more than you’re making? If so, you’ll need to cut back on spending wherever you can. Ideally, your expenses will be less than your income, so you’ll be able to put the rest into a savings account. This savings account will be crucially important for any unexpected medical expenses, home repairs, vehicle accidents, etc.
Now that you have an idea of your income and expenses, take a moment to make sure your spending is consistent with your ideal values and lifestyle. For example, if one of your retirement goals is to maintain your health, but you’re spending a lot of money on fast food each month, perhaps you can limit or reduce your fast food budget. You don’t have to completely eliminate things you enjoy from your life (and in fact, we recommend you don’t!), but you can set sensible goals, like eating out only once per week instead of 3 times.
You might think that some of your expenses, like the electric bill or car insurance, are fixed and non-negotiable. But you can actually negotiate almost any bill you get! Shop around to different insurance companies, power companies, or cell phone providers to see if you can get the same coverage for a better price. Even if there are no other companies that provide the same service, give your provider a call and talk to them about lowering your bill. Many of them can help get you a discount, and it never hurts to ask!
Thrifty Travel Tips
Many seniors prioritize travel during their retirement years. And indeed, retirement is a great time to travel and see the world. You’re no longer burdened with buying plane tickets for your children, you aren’t limited by a work schedule, and you want to make the most of your time. But make sure you still remember your budget when traveling! Travel expenses can add up quickly, and throw you into debt faster than you’d think.
Try to employ some simple thrifty travel strategies. For example, get a travel rewards credit card. By using a travel rewards card for your everyday purchases, you’ll get points you can use on airfare, hotels, and more. You can pay for most or all of your stay without doing any extra spending!
Also, make sure to check for senior discounts wherever you go. Most countries do offer senior discounts on things like concerts, movies, restaurants and more. Some airlines, trains, buses, or subways may have senior pricing as well. Check out AARP to see if they offer discounts on products or services you normally use while traveling, too.
Use your usual budget sense while you’re traveling. For example, you could set a limit on how much you’re going to spend on each meal. To reduce your meal expenses, stay at a hotel with free breakfast, pack sandwiches for lunch, and see if you can save and reheat leftovers. Utilize public transportation when possible to save on gas and rental vehicles. Lastly, keep an eye on your shopping budget.
Check on Your Investments
It’s time to reevaluate your investment portfolio. Meet with your financial advisor to see what changes they advise as you enter retirement. Many seniors switch to less risky, more conservative investments once they hit retirement. If you need to cash out some of your investments, now is the time to see how that will impact your monthly income. If your current investment company isn’t meeting your needs, consider meeting with other companies and switching to a new advisor.
Consider Downsizing
Downsizing is one way to lower your monthly expenses. If your rent, mortgage, home insurance, or utility payments are higher than you’d like, now may be the time to make some changes. You could sell your home and move into a smaller place, or perhaps a condominium or apartment. This will lower not only your mortgage payment, but also your property tax, home insurance, and utility payments. Any extra vehicles or unused “toys,” like boats, kayaks, ATV’s, or motorcycles, could be sold to help reduce insurance payments and bolster your savings account.
As you decide how to downsize, a good financial tip for senior citizens might be to consider moving to a senior living community. Senior living communities offer many different options, from fully independent living to full-time care. Even if you don’t have any medical or assistance needs at this time, an independent senior living community might be right for you. It bundles all of your bills and payments into one easily managed package, which makes budgeting much simpler. You may actually end up saving money, since all costs are included in your monthly payment! This usually includes not only rent, but also food, utilities, maintenance, entertainment, transportation, cleaning, laundry, and more. Take a tour of a Stellar Living community near you today and see what they have to offer.
Estate Planning
Estate planning is not most people’s favorite choice of activity, but it is particularly necessary for those in their golden years. Make sure you have a recently-updated will that has been reviewed by a legal professional. You can check out this post on writing a great will if you need any assistance. It’s important to have plans for your end-of-life care, memorial or funeral, and how and where assets will go. Make sure your children or any other beneficiaries are in possession of these documents as well. This will not only make sure your wishes are met, but will also make life much simpler for your loved ones. It’s one of our less expected great financial tips for senior citizens.
Understand Social Security
Social Security benefits are difficult for many seniors to understand. It’s a complex system, and can take some time and research to figure out. We have prepared a complete guide to Social Security to make things easier for you. Feel free to check it out here. This will allow you to make sure you’re getting the full benefits you can receive.
Healthcare Planning
Healthcare is another difficult and complex system, especially for retirees who are no longer covered by insurance provided by their employer. Check out this post on Medicare and other types of healthcare to find out how to get Medicare coverage, when you are eligible, and more.
With these simple financial tips for senior citizens, Stellar Living hopes you’ll be well on your way to achieving financial fitness in your golden years.
