Financial Mistakes Seniors Commonly Make After Retirement

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Many seniors fall into financial trouble because they do not plan well enough. If you are a Fort Worth live-in caregiver, then you may want to discuss finances with the senior to help him or her avoid the following common financial mistakes.

Not Understanding the Financial Situation

Many seniors do not have a financial plan upon entering retirement. They are used to living paycheck to paycheck and have no plan for retirement. Seniors need to stop and make sure they have enough money coming in to cover their basic living needs. If there is not enough money coming in, then they may need to consider how they are going to cut unnecessary expenses. Unfortunately, that may mean selling the family home and moving to a cheaper place. Whatever the case, Fort Worth, TX, elder care professionals recommend talking with your loved one to establish a game plan.

Not Having an Emergency Cash Fund

Seniors should have at least two years of expenses set aside in cash. Most seniors will need about 80 percent of the money that they were spending when they were working. After accounting for money that automatically comes in each month, the senior should work at setting aside enough money each month to fully fund this account as quickly as possible. 

Not Having a Wise Investment Plan

After the emergency fund is fully funded, then seniors should consider making wise investments. With bank accounts generally paying no interest, seniors need to be investing their money where it can grow. For most seniors, at least 40 percent of their investments should be in a safe investment that grows at the rate of inflation. Possible solutions include treasury notes, mutual bonds and certificates of deposit.

Not Having a Household Budget

Seniors need to create a household budget. Have the senior start by writing down every penny that he or she is currently spending. Many will be surprised where their money is really going. Create a plan for paying bills and for savings. 

Family caregivers should help seniors understand their current financial situation. Then, help them develop a sensible program for the future. Alternatively, you can turn to Home Care Assistance at (817) 349-7599 for advice on financial management. We provide flexible live-in and hourly senior care Fort Worth families can rely on to help their loved ones age in place comfortably. Call today to set up a free consultation with an experienced Care Manager.