Financial Planning and Budgeting Tips for Seniors

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Enjoying a good life at any age requires some financial planning. Sadly, studies show that more than half (CNBC.com) of all Americans don’t know how much money they’ll need during retirement. Financial planning helps to ensure that you’re able to afford the lifestyle you enjoy throughout your senior years. As a senior, that will mean being realistic about potential healthcare costs, inflation rates, and your budget.

Here are some ways you can manage your money so you can enjoy your golden years.

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Healthcare Concerns

One of the most significant costs during retirement is healthcare(US News), according to US News. Even if you feel healthy today, it’s wise to plan for whatever the future might hold. Spending a few extra dollars on healthcare can save you money by reducing your medical costs in the long run.

Another important aspect of healthcare is treating your body right. Regardless of age, it’s essential to eat a balanced, nutritious diet. Mayo Clinic reports that malnutrition is a common problem among aging adults. By eating the right foods and caring for your body, you’ll reduce your chances of developing debilitating conditions like compromised immunity and muscle weakness, and be less prone to increased risks of injury, hospitalization, or death.

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Downsizing

Another way many seniors save money during retirement is through downsizing. If your home is bigger than needed, moving into a smaller space can be helpful. By carefully researching your desired housing market, you may be able to find a home that’s more affordable and easier for you to manage. Downsizing can make it easier for you to age in place. As with any move, however, planning is required. How much can you afford to spend, and what’s desired location? Will you move closer to loved ones? Do you need a home closer to public transportation?

According to Forbes, some of the best parts of the country for seniors (Forbes) include Sarasota and Savannah. In addition to having a warmer climate, these areas are surprisingly affordable with a low cost of living and more affordable property values.

After deciding where you’d like to move, you’ll need to declutter (Refined Rooms) and pack your belongings. You’ll also want to determine how you’ll safely transport your furniture and possessions to your new home. To avoid injuries or broken items, it’s usually wise to ask for or hire help for your move. If you don’t have loved ones who can assist, hiring movers can be less expensive than the costs of repairing anything damaged during the move.

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Living on a Fixed Income

With proper budgeting, you can master the art of living on a fixed income. By tweaking your monthly finances, you can stretch each dollar and still live life to the fullest. Stick to a monthly budget and cut unnecessary spending or nonessential expenses. It also pays to look into senior discounts on housing, insurance, and utilities.

You might also consider hiring an accountant to help prepare your taxes. Seniors who don’t itemize deductions often save money with the highest possible standardized deduction, notes the AARP. You’ll pay a little extra each April for your accountant’s services. Luckily, the potential money you’ll earn back on your tax return could be well worth the cost.

Although many seniors spend less money during retirement, two in five (Motley Fool) still spend more than they’d anticipated. That’s why it’s essential to have a plan in place. Inflation is expected to rise (Knoema) in the coming years, so account for higher costs in your budget. Budgeting and financial planning are crucial at any age and can better prepare you for the future as a senior. By carefully planning, you can maintain a high quality of life and still participate in many of your favorite activities.

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Sources:

-Martin, Emmie. "56% of Americans don’t know how much they need to retire—here’s why that’s a problem." CNBC, 13 July 2019. https://cnb.cx/3EYcjEU

-Lankford, Kimberly. "Preparing for Medical Expenses in Retirement." US News Money, 07 Aug 2020. https://bit.ly/3F0Ddfh

-Barrett, William. "The 25 Best Places To Retire In 2019." Forbes, 23 April 2019. https://bit.ly/3bUGwZd

-"How to Start Decluttering: Foundations of an Organized Home." Refined Rooms, Jan 2021. https://bit.ly/307p0P7

-Yeager, Jeff. "11 Things That Are Cheaper in Retirement." AARP: Money, 2015. https://bit.ly/3qjGeDv

-Backman, Maurie. "2 in 5 Americans Spend More Money in Retirement Than Expected." The Motley Fool, 15 Dec 2018. https://bit.ly/3wvj51X

"US Inflation Forecast 2019-2024 and up to 2060." Knoema, 16 Apr 2021. https://bit.ly/3D20zRj

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Guest post by Karen Weeks: Karen created Elder Wellness as a resource for seniors who wish to keep their minds, bodies, and spirits well. Photo courtesy of Pixabay