What Seniors Need to Know About Financial Planning

By on August 31, 2017

Medicare supplement

Does financial planning change as we get older? Put simply, yes, your financial planning options are different at 65 years old than at 25. But just because you’ll have new concerns to address that doesn’t mean you won’t be able to handle it. In fact, the basics of your new financial plan can be summed up into five easy categories.

The Five Categories of Financial Planning Seniors Must Get in Order Before Retirement.

Preferably, each of these sections will be sorted out before the big day. Here are the things you’ll want to take care of beforehand.

Medicare: If You Use It, Stay Abreast of the Important Paperwork.

About 15%, or 44 million, of Americans use Medicare for some or all of their medical expenses. Medicare can be broken down into categories:


    Medicare Part A and B: Both are referred to as the Original Plan

    Medicare Part C: Referred to as the Advantage Plan, with can help supplement the costs of care outside of Medicare’s appointed physician network.

    Medicare Part D: This type covers prescription drug payments

A tally that starts at age 65 that counts the average amount a senior couple would spend on medical expenses over a period of 20 years found the total to be roughly $218,000. Seniors need to understand their financial planning options for their Medicare expenses before taking their retirement.

Due Diligence: Don’t Use Family Members For Financial Matters.

The FIDC recommends that seniors take advantage of the Financial Industry Regulatory Authority (FIRA)’s website. There it is possible for visitors to make a checklist of what to look for in an investment professional. You might choose a broker, financial advisor, an accountant, or an insurance advisor.

Do not choose a family member to handle your finances, perhaps even if they happen to belong to one of the professions above. It can be difficult to tell a family member no. But when the matter concerns your livelihood, it is better to have a few bruised feelings than to be without an adequate income.

Take a Hard Look at That Portfolio.

When we’re young, it is recommended that our stocks reflect diversity in the form of some slow-growing stocks, and more risk-taking stocks. As we age, advisors recommend that we begin to convert most of our stock options into the slow-growing type to protect our assets. Of all your financial planning options, this one has the potential to make the biggest impact on your future monthly income. Stocks average returns of about 9.5% per year, which if maximized at $5,000 per year for 30 years, it will eventually grow to $750,000. That’s much better than simply sitting on the $150,000 that was originally invested.

Short-term Planning: The Present Matters Too.

Among your financial planning options should be the short-term goals. What are your goals for the month? Or the end of the year? Before you retire, make sure you are meeting the short-term goals that will add up to assist with the long-term ones. A final sum to achieve before retirement is great, but unless it is broken up into manageable pieces, you’ll never make it.

Long-term Planning: Why You Need an Estate Plan.

All of your financial planning options are built on the idea of the long-term goal. You’ll want to have saved a certain amount, have a certain amount of debt, and have changed the layout of your portfolio to match your new goals. In your planning do not forget that accumulation is not the only financial worry.

As a senior close to retirement, it is helpful to remember the painful truth that your days are winding down. It is good to have a plan for when you are gone. An estate plan will help your beneficiaries carry out your final wishes. Do not forget this step in your financial planning.

There is an abundance of financial planning options available. But when you are getting closer to retirement, your needs are a little different. Remember to get your affairs in order, plan for the short-term, have a professional with good certifications look over your portfolio, and get your medical plan sorted out. It’s really quite simple, if not the most engaging of tasks, so get started today planning for your tomorrow.

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