4 Mistakes Seniors Should Avoid When Planning Their Finances

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Retirement planning can be a daunting and confusing endeavor, especially when it comes to finances. There are countless factors seniors must consider, and many of these factors aren’t guaranteed to remain static, which leaves room for errors if they are not careful. The Folsom caregivers at Home Care Assistance discuss 4 financial mistakes your aging loved one should pay mind to and do his or her best to avoid.

1. Overlooking Inflation

The overall value of your loved one’s savings will likely change as the cost of living rises, which makes low-risk and low-yield savings accounts insufficient for staying ahead of inflation. Your loved one should try to incorporate assets into his or her investment portfolios that entail a modest amount of risk and provide a higher yield on returns.

2. Failing to Save Enough Money

Many people underestimate the number of years they’ll live after retiring, and some make the mistake of assuming the majority of these years will be spent in good health and living in their own homes. The average life expectancy has significantly increased, which means your loved one might have to make his or her retirement funds go a lot further than originally planned. Your loved one may need to account for long-term Folsom, CA, elder care costs and should also plan to have sufficient income for seeing him or her through the years following retirement. 

3. Jeopardizing Their Futures by Helping Family Members

During the retirement years, money saved truly is money earned. Although many seniors have limited overhead costs and entertainment expenses, any extra cash left over at the end of the month should be saved rather than given away. Once your loved one retires, he or she should stop being the go-to source for extra funds when cash flow issues rear their heads. As difficult as it might be, your loved one has to learn to be firm with family members and should stop issuing handouts. Though it may be feasible to offer a limited amount of financial help in special circumstances, handouts should never become regular events.

4. Relying Too Heavily on Social Security

The average social security benefits for retirees are often insufficient for covering housing costs, which means your loved one might not be able to maintain an acceptable quality of life without additional income. The future of supplemental social security income cannot be counted on because this program is likely to undergo privatization in the coming years.

To learn more about managing finances in the senior years, reach out to Home Care Assistance, a leading provider of respite and 24-hour care Folsom, Granite Bay, and Placer County families trust. During a complimentary consultation, we can customize a care plan to meet your loved one’s individual care needs and modify the plan as his or her needs change. Call one of our knowledgeable Care Managers at 916.226.3737 today to learn more.

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