Financial Tips for Seniors

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Finances aren’t something we’re all comfortable dealing with, especially if we aren’t fully taking advantage of all the options and opportunities available to us. Even if you’ve saved an adequate retirement fund, it’s important that you make the right financial choices throughout your senior years. If you’re living on a fixed income or pension your money needs to stay where it is and be used to its best benefit, not put at risk or used inefficiently. Follow these tips to ensure you don’t fall prey to scams or miss out on opportunities to maximize your retirement funds.

Reverse Mortgages: Borrow with Care

Reverse mortgages allow homeowners over age 62 to borrow against their home equity without having to make payments on that loan, as long as they meet certain standards like maintaining property tax payments and homeowner’s insurance. However, it’s not just free money—when you or your beneficiaries sell the house, that borrowed funding must be paid back with interest. The Home Equity Conversion Mortgageoffered by the Department of Housing and Urban Development (HUD) is the most popular source for these loans, but make sure if you choose to borrow that your spouse, or children, won’t be at risk of losing the home if their name isn’t also on the mortgage.

Learn the Signs of Fraud

Modern technology has lent itself well to scammers up to no good. Whether they’re using mail, phone, or internet to target their victims, there are tons of red flags to look for when it comes to fraud. For example, any individual who asks you for a small up-front payment for services or fees, but guarantees you a huge lump sum later, isn’t someone you should put any trust into. Any unexpected or unsolicited phone calls asking for your personal information or bank account information should be suspicious. Remember that government entities like the IRS will never contact you by phone, email, or text to demand immediate payment or ask for personal information—they only work through certified mail, for exactly this reason.

Health Savings Account (HSA)

A health savings account is a great financial option for many retirees, especially if you want to safeguard against unforeseen medical expenses you can’t handle all at once. If you have a high deductible, your insurer might automatically open one for you, or you can contact a third party like a bank to open one yourself. It’s important to understand exactly what procedures and medications are covered by the HSA. For example, it will likely cover your prescriptions, but if you use it to buy over-the-counter medicine, you might face a tax penalty. The nice thing about an HSA is that you don’t pay taxes on the money when it is used to pay for a qualified cost, and you can even claim a tax deduction up to a certain limit for your contributions each year.

Streamline Assets

Multiple cars, a big house, insurance policies, timeshares—most seniors at the end of a successful career find themselves with lots of assets. Those assets can often come with high costs to maintain and keep, which can become burdensome on a fixed income. Review the assets you have accumulated, and consider what you want or need to keep and what you can part with in order to reduce your monthly expenses or increase your retirement funds. Instead of two cars, maybe you now only need one. Perhaps you no longer need a vehicle at all. You might also consider selling your home in order to purchase a smaller dwelling. You can even sell a life insurance policy through a life settlement if you need to bring in some extra money or reduce your monthly expenditures. Life settlements give many seniors a great opportunity to substantially increase their funds while also relinquishing the responsibility of maintaining premium payments.

To see if you qualify for a life settlement, visit our Qualification Calculator today!

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