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Financial Mistakes Seniors Might Make After Retirement

If you are an in-home caregiver in North Coast, then you may become concerned about your elderly loved one’s finances. While it can be difficult to have these conversations with a senior parent or family member, it is important to act in the senior’s best interest. Below are some common mistakes retirees make when their loved ones don’t intervene.

Not Adjusting to Lifestyle

Many seniors are used to working and having money to spend however they choose. When they retire, however, they find that they have even more time to do the things that they enjoy. Some seniors forget to consider the cost of those activities and therefore overspend. As a family caregiver, you may want to consider suggesting low-cost alternatives to the senior’s most expensive activities.

Not Adjusting Investments

Seniors may have most of their money in medium-risk and high-risk investments. This helped their retirement nest egg grow faster when they were working. Now that they are retired, they need to have at least three years of expenses in cash. Then, they should have about 40 percent of their expenses in low-risk investments such as certificates of deposit, treasury bonds and mutual funds.

Applying for Social Security Too Early

Seniors often count the days until they turn 62 and can retire. This can be a very costly mistake if they retire too early. Seniors who continue to work until they are 66 get about 25 percent more money each month. If the senior stays healthy, waiting until they are 70 to start drawing Social Security allows them to draw about 32 percent more each month.

Spending Money Too Quickly

Many seniors receive a large nest egg when they retire. Seniors often fall prey to spending a large amount of that money shortly after they retire. They forget or ignore the fact that money may not be coming in on a regular basis. North Coast aged care professionals encourage family members to gently remind seniors how long that money may need to last to avoid this mistake.

Family caregivers should have conversations with seniors. Understanding the situation before medical issues arise allows everyone to be on the same page. Learn more about financial planning when you call Home Care Assistance at 1300 LIVE-IN or (02) 6646 3527. We provide affordable live-in and hourly home care North Coast families can trust to help seniors age in place with dignity. Schedule a complimentary consultation when you call today.