5 Smart Financial Planning Strategies for Seniors

5 Smart Financial Planning Strategies for Seniors

Set a Budget for Your Household and Do Everything You Can to Stick to It

If you have been living on a budget for years and could do it in your sleep, good for you. You already have the first step to financial security down pat. For everyone else, though, formulating a budget and sticking to it religiously will be the foundation for establishing good financial habits that last the rest of your life. Start out by making a list of all your expenses. Order the list from most essential to least essential, and make note of each expense’s weekly or monthly cost. This list will probably include housing, groceries, utilities and vehicle-related costs, among other things. Add up the per-period cost for each expense, then add up your per-period income. Once you subtract the expenses from your income, you will know how much discretionary income you have to use however you see fit each week, month or year.

It is wise to use at least some of your discretionary income to purchase assets that will create passive income and make you money in the future, such as stocks or bonds. The rest should be used for enjoyment or put into a savings account so you will have it if you ever experience any financial distress. Knowing how much money you need to cover all of your expenses during a given period and then establishing habits to make sure you have it is a huge part of the budgeting battle. With any luck, your financially responsible habits will rub off on your friends and family, too.

Hire a Financial Advisor, Financial Planner or Some Other Type of Financial Professional to Help You Manage the Assets You Have Already Accumulated

When you have a problem you do not know how to solve, it is a good idea to find an expert who can probably solve it for you. Financial professionals make their living giving their clients sound financial advice. If their advice is no good, they typically do not make very much—if any—money. Since they are often paid a percentage of the assets they have under management, they usually have every incentive to help you maximize your return on the money you invest with them so they can increase their own earnings. Do your homework while you are selecting an advisor to make sure the advisor make their money primarily from fees charged to your account or from selling you add-on products that will not provide you nearly enough value to be worth purchasing. For questions related to financial topics, find a financial professional you trust and do not be afraid to ask them about anything.

Turn One of Your Hobbies into a Moneymaker

Analyzing your budget to figure out where you can cut down on expense is a good idea if you want to increase your discretionary income. You can only cut your expenses so much, though. At a certain point, you need to start making more money. A satisfying, relatively simple way of doing this is turning one of your hobbies into a new part-time—or even full-time—job. Internet ads and social media make it easy to advertise your products or services and reach a wide audience. Use these platforms to attract customers without having to pay excessive fees for print advertisements. The supplemental income will do wonders for your budget.

Retain an Experienced Trusts and Estates Attorney to Establish a Trust That Will Allow You to Protect All of Your Assets

Nobody wants to think about being the target of a lawsuit or being in a particularly vigilant creditor’s crosshairs. Unfortunately, situations in which judgments are entered against individuals arise frequently. Although an insurance company often ends up paying the judgment on the individual’s behalf, this is not always the case. If you want to be proactive about protecting your assets from parties who may seek to recover them in an attempt at satisfying a judgment, you should hire an attorney to establish an asset protection trust for you. This is especially true if you work in a field that is a lightning rod for litigation. The purpose of an asset protection trust is to shield your assets from creditors. If you hire an experienced attorney who knows how to structure an asset protection trust, your assets will be protected even if you get sued and a judgment is entered against you.

Be Proactive in Applying for Medicare Benefits and Social Security Benefits

As you age, and especially after you have exited the workforce, Medicare benefits and Social Security benefits will be extremely important parts of your life. Depending on your specific physical health, mental health and financial health situation, it may be difficult for you to get by without government benefits. Plan ahead and visit both the Medicare website and the Social Security website long before you plan to apply for benefits so you know what the requirements are ahead of time and can make arrangements to make sure you meet all of them. You do not want your benefits to be denied, decreased or delayed due to a lack of preparedness on your part. Not only would complications with your benefits potentially place a significant strain on your bank account, they could also mean the difference between getting the medical care you need and having to go without it

Image Credit: business leader via Freedomz/Shutterstock

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