Financial Planning in Later Life
Regardless of age, many of us worry about money, but older people, in particular, may find they need extra help organising their finances. Conditions such as dementia can impact their ability to make informed choices while a physical disability or visual impairment may cause problems dealing with the bank or getting online. Perhaps their spouse is no longer there to help handle the finances and they find it difficult to know if they are making the right financial decisions for themselves. And of course, there is an increased vulnerability to fraudsters.
Older people still have plenty to think about when it comes to finance, however: health care, pension, insurance, bills and of course home care. People are living longer and it is more important than ever to manage our finances as we head into later life and old age, so that we remain as financially comfortable as possible and free of worry. After all, many elderly people have worked hard all their lives and want to try and enjoy retirement without constantly fretting.
Nearly 80% of older people will need some sort of care by the time they reach 80. Working out how to put money aside for care in the future is complex and can be a daunting task, and for many elderly people, staying independent in their own homes for as long as possible is at the heart of making informed financial choices.
Not everyone has the know-how to manage their money and at times, it can feel overwhelming. Here are a few sensible tips on managing money in older age, whether for yourself or for an elderly relative or friend:
- Create a budget and plan ahead. Your retirement fund may not be as high as the income you’ve been used to, so adjusting your budget is essential. Don’t rely solely on your pension in older age – if you’re confident with financial markets, think of ways to generate income by investing in property and stocks for instance.
- Check for better deals on your savings, mobile phones, broadband, home insurance and mortgages and don’t be afraid to switch suppliers and banks; you could save literally hundreds of pounds a year for the cost of spending just an hour or two on the computer.
- Be cautious with your cash! It’s tempting to treat family members and enjoy your golden years in style, but don’t forget you may need additional care costs further down the line.
- Ask for help. Family members, friends and other relatives will be happy to advise on day to day financial matters; having someone trustworthy to manage money on your behalf will not only relieve stress but also potentially help grow funds via sensible investments. For large amounts or for more complex money issues, seek reputable, professional help.
- Streamline your finances. Unless you really know what you’re doing, keep things simple and cut the number of bank accounts to, say, one current and one savings – and limit your investments to help keep track of them. It will also reduce the number of passwords you need to remember for each account!
- Be aware. Older people are, unfortunately, often the target for fraudsters, so if in any doubt about a proposed investment opportunity, don’t sign anything and ask for a second opinion from a trusted friend or relative.
- Finally, if the time comes to give someone else the right to deal with your finances, consider setting up a power of attorney. A person can have more than one ‘attorney’ in place and there are different types of power of attorney arrangements in the UK, depending on the region so it’s worth investigating which one applies to you.
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