Balancing a checkbook and saving for the future are all tedious tasks but very important ones, especially as you near retirement. Though there are many opportunities available to help you plan and pay for retirement living, wading through all the options can be daunting, even with the guidance of a financial expert.
To help you stay on target with your senior living goals, here are three tips that can help you avoid common financial mistakes. This way, you save (not waste) money for the type of retirement lifestyle you deserve.
3 Money Saving Tips for Seniors
Don’t Put Too Much Reliance on Social Security
According to the Social Security Administration (SSA), the average benefit for retired workers is approximately $1,544/month. This benefit provides you with a good source of supplemental income if your home is paid for and you have set up a nice retirement fund.
However, the SSA also indicates that 52% of married seniors and 74% of unmarried seniors receive more than 50% of their income from social security. If possible, try to avoid being exclusively dependent on Social Security as your only source of retirement income.
Keep Your Estate Plan Up-to-Date
Did you know that over 60% of American adults do not have a will or other estate plan in place? And those who do are under the impression that once it’s set up, you don’t need to think about it anymore. Sadly, this is not true. In fact, if you don’t keep your will up to date, you can expect some unwanted consequences. Let’s review a few situations that require your attention and action:
- If one of your original beneficiaries dies, and your will does not reflect the change, you could pass large fees onto your family or have the decision of where it goes be left to your state government.
- If you experience a major life event (i.e., move to a new state, remarry, have grandchildren, etc.), you’ll have to update your estate to reflect these changes.
- If the individual you have chosen to be power of attorney over your estate suddenly dies or is unable to fulfill this essential role, you’ll want to update this appointee immediately.
These are just a few scenarios and reasons why it’s important to update your estate plan regularly. The good news is you’ve already done the hardest part by creating one. Making modifications, as needed, is less of a strain and ensures your wishes are carried out. We recommend reviewing your estate plan annually to keep it up to date.
Avoid Falling Victim to Scammers
Seniors have long been a target of swindlers and scammers. And now, more than ever, people of all ages are getting scam calls, emails, text messages—you name it—on a daily basis. And sometimes, this occurs multiple times a day. The Federal Trade Commission reports that scams related to SSA are still the number one type of scam in the country.
Ever hear of “spoofing“? This is a common trick among scammers to gain your personal information by pretending to be a viable source. Perhaps you have already had someone call imitating your bank, the IRS, or as noted above, the SSA.
Scammers can even have the name of a business or entity show up on your phone’s caller ID, making you think it’s your bank, when it’s really someone trying to scam you out of money. We know this sounds scary, but there are a few tricks to help you avoid this situation:
- Don’t Answer the Phone – Sounds simple, but there is no law that says you “need” to pick up the phone. If you see a caller ID for a bank you use or for a government entity, let it ring and then listen to the voicemail after.
- Quick Note: The IRS, SSA, and other government entities will never call you for personal information or demand payment over the phone. They will send you an official letter instead. As soon as you see the caller ID, or you hear someone telling you that they are from the federal government and you need to pay them now, you can immediately assume this is a scam call.
- Only Call the Number on the Website – Let’s say you let the call go to voicemail, and the caller says you must urgently call them back at a specific number to settle a dispute or provide information to prevent a potential “hack” on your account.
Here’s what you need to do next:
- Even if you believe the caller may be legit, go to the company or organization’s official website to find the correct contact information.
- Call that number and tell the representative that you received a message and provide further details. If someone from that business or entity did call you, they will have a record and will be able to connect you to the correct department.
- If there is no record of a call made, they can inform you of this and that settles everything. In actuality, the business will appreciate the heads up that someone is performing a potential scam using their credentials. This will allow them to alert other customers, too.
- Hang Up – A lot of people think hanging up is rude, but it’s your right. Remember, scammers will try to scare you into staying on the call and giving them the information they want. They may say any of the following:
- You owe money and could go to jail if you don’t pay now.
- You have a pending case against you in the court of law.
- Your bank credentials were found on the dark web. You need to provide us your information, so we can update your account to prevent a further hack.
- You are wanted by the police department.
Remember, all of these scenarios will require a letter, not a text or a voicemail. Another way to think critically about this is if the government or police want to find you, they already know where you live. They would never send a text message or email. Find valuable tips on preventing senior fraud in our dedicated blog post on “Helping Seniors Prevent Fraud.“
One Last Piece of Advice
Because your bank or credit union will likely call you if they notice suspicious activity on your account, you might find it difficult to know whether the person on the other end of the call is legitimate, especially if they have some of your personal information already.
Our best advice is to end the call immediately and then call the actual number to your bank or FCU. You can find this number on the back of your bank card or on their company website. If there is a legit hack going on, they will know and will be able to direct you to their fraud department.
Falling victim to scammers is one of the fastest ways for someone to lose everything—identity, retirement savings, social security, etc. You and your family need to stay educated on the tactics used by scammers. Though the web is used by scammers to get your information, it can also be used as a resource to check the type of scams others are receiving.
For example, you can Google the type of call you receive, and without fail, you will read endless forums of other people receiving the same exact call. This is a good way to ensure that you’re certainly not alone, and it will also help you understand the types of scams that hackers are using most often.
What More Tips on Financial Planning for Seniors?
Stay connected to our senior living blog for more money saving tips for seniors. If you have any questions about financial planning for your retirement, or for the retirement of a loved one, Sweetwater can help connect you with someone who can help.Contact us