Money is a huge stressor for everyone, but especially so when it comes to seniors over 70. As healthcare costs continue to skyrocket, the average senior citizen on a fixed income may find that they are unable to pay their medical bills without assistance or without incurring some level of financial hardship. Furthermore, as people age and think about retirement, both long-term care costs and social security benefits begin to weigh heavily into planning for the future. Lastly, many retirees outlive their retirement savings before passing away due to factors such as inflation and rising healthcare expenses. Take a look at some of these common financial stresses facing seniors and how they can prepare for them.
1. Rising Healthcare Costs
Healthcare costs are one of the largest financial stresses facing seniors. Medical bills, prescription medications, and other associated healthcare expenses can quickly become unmanageable for a fixed-income senior citizen. The good news is that there are assistance programs available to meet the needs of seniors with limited incomes and resources. This can include Medicaid and Medicare Advantage plans, which cover some or all of these expenses.
2. Long-Term Care Costs
Long-term care can become a daunting expense for many seniors, especially with many people today living longer — and spending more time in long-term care — than before. The costs can include nursing homes, assisted living facilities, as well as in-home care services.
3. Declining Social Security Benefits
One of the biggest concerns for many retirees is dwindling Social Security benefits. These benefits may have once been enough to cover most, if not all, of a senior's living expenses. However, as cost-of-living increases and social security payments remain constant (or even decrease), seniors may find themselves in financial distress sooner than anticipated.
4. Outliving Retirement Savings
Relying solely on safety net measures such as Social Security benefits or savings stored away can leave seniors at risk of outliving their retirement savings. Unfortunately, many seniors did not factor in the full impact of inflation. They may even not have anticipated that their retirement savings would need to last for as long as they have.
Strategies for Preparing to Avoid Financial Stress
No one can predict the future. However, proper financial planning and implementing certain strategies now can help seniors prepare for potential financial issues down the line.
Create a budget and adjust spending.
Establishing a regular monthly budget that allows for some flexibility is essential. Review expenses regularly to see where savings can be made or to realign expenditures with retiring income sources.
Consider a reverse mortgage.
Reverse mortgages are options offered by federal (USDA-approved) lenders allowing individuals over 62 years old to take advantage of their home's equity without having to make repayments until they pass away or sell their home—making them an attractive option for some retirees looking for additional funds in retirement.
Invest in long-term care insurance.
Long-term care insurance policies cover qualified nursing home bills, assistive living expenses, and even in-home senior care services. This can help protect families from steep out-of-pocket costs related to elder care needs.
Maximize Social Security benefits.
While Social Security payments may remain constant regardless, there are still steps that could increase these benefits significantly such as ensuring enrollment is done on time, taking advantage of credits available if applicable, and so forth. A professional financial advisor specializing in social security options should be consulted when evaluating individual opportunities to maximize SSI weekly payouts.
Create a retirement plan.
To supplement other resources available to seniors upon retirement, creating a detailed retirement plan may also provide additional peace of mind towards protecting against future issues as needs change.
Senior Care Services Can Decrease Costs and Keep Seniors at Home Longer
Having the right services and support can help many families avoid more expensive costs down the road. At Senior Helpers Inland Empire, we help provide in-home care for seniors in Chino, Corona, Chino Hills, and San Bernardino County, keeping them at home longer. Contact us today to learn more about how we can help.