As our parents and grandparents age, planning for their security becomes increasingly important. In this blog from Senior Helpers of Bolingbrook, we'll break down some of the biggest financial stressors facing seniors and strategies to prepare for them.
Overview of Financial Stressors
1. Rising Healthcare Costs
With Medicare and supplemental health insurance being projected to increase over the next few years, seniors need to be prepared for unexpected healthcare expenses.
2. Social Security Benefits
Many retirees rely on social security income, and benefits are shrinking nationwide. The idea that benefits may not be what they used to be can cause a great deal of stress for your senior.
3. Long-Term Care Costs
Seniors and their families need to understand what options are available when it comes time for long-term care. Whether you choose in-home senior care services or an assisted living facility, both come with different associated financial requirements.
4. Retirement Savings
Many seniors don't have adequate funds in their retirement accounts when they leave the workforce, making it much more likely that they will struggle with debt.
5. Tax Burden
Taxes typically rise later in life because of increased earnings from investments (or sources like Social Security).
Strategies to Prepare for Financial Stressors
1. Maximize Social Security Benefits
Knowing your best filing strategy when it comes to social security is key; claiming at the right time can make a huge difference. Seniors should speak with an experienced financial advisor to understand their specific options and maximize their benefits.
2. Create a Retirement Plan
Planning for retirement starts with understanding what types of investments are best suited for retirees, such as mutual funds or index funds. Diversifying investments — whether targeting income-generating opportunities without taking on too much risk or considering alternative strategies like annuities or reverse mortgages — can help ensure that goals are met over time, even in a diminishing interest rate environment.
3. Invest in Long-Term Care Insurance
Depending on the chosen policy, long-term care insurance helps seniors defray costs related to nursing home stays and home health services (depending on the policy terms and budget limitations).
4. Utilize Tax Benefits
When creating a plan for managing taxes, be sure to consider age-based exclusions from taxable income allowances and deductions. Additionally, if you have stocks held in retirement accounts, you may be able to convert them into tax-free Roth IRAs before cashing out. This provides more money post-tax than traditional IRA distributions, which are taxed upon withdrawal.
5. Consider Reverse Mortgages
For those retired homeowners who need additional sources of monthly income, there is also the option of opting into a reverse mortgage, called a Home Equity Conversion Mortgage (HECM). These allow seniors living in their own homes to forgo monthly mortgage payments, among other benefits. Check with local lenders & mortgage brokers about loan amounts & aging eligibility requirements needed before applying.
Senior Helpers Is Here For Your Elderly Loved Ones
Financial planning for seniors can feel daunting, but with the right information and support it doesn't have to be! At Senior Helpers of Bolingbrook, we understand the complexities of financial obstacles that come with aging and help provide resources to ensure our clients are prepared. Whether you need assistance navigating Social Security benefits or a plan for retirement savings, we are here to guide your journey. Contact us to learn more about how our caregivers in Bolingbrook, Crest Hill, Joliet, Lockport, Romeoville, Downers Grove, Woodridge, and Darien can help.