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By the time we reach retirement, most seniors have a history of being responsible, both financially and societally. When approaching retirement, you should ask yourself; did I budget enough for retirement? and, have I been financially responsible to live comfortably? Here’s what you need to know about the importance for seniors to be financially responsible.
How Financially Responsible Should You Be?
When you ask yourself whether it’s still important to be financially responsible as a senior, you will find that it is more a question of “how responsible should you be?” Everyone’s circumstances are different which means financial responsibility varies based on your current situation since no-one wants to struggle financially in retirement.
Many seniors are on a fixed income and, some may have been unable to save enough to cover unexpected living costs. People avoid thinking about unpleasant possibilities, such as the possible need for memory care, long term care, nursing home costs or unexpected medical costs. It is most often assumed that these unanticipated expenses will be covered by Medicare or family. It is a hard lesson to learn that this is not always the case.
If you have been financially responsible and able to pay for your medical costs and living expenses, then you are in a good place. Having cash savings, and investments to rely one can allow you to enjoy life and, this reduces the stress of worrying about how to pay for your day-to-day needs.
What if I Have Family Obligations Financially?
Obligations or choices you make to financially support family, is something is always a consideration regarding your finances in retirement. Being able to continue to financially support them depends on how you manage your finances beyond your daily living expenses.
- Do you still have people in your life that are depending on you for financial assistance? Although you might have enough money to sustain your lifestyle, what if you have someone that still needs your financial help?
- Do you have grandchildren that need help with college tuition?
- Your child could be in the process of buying their first home or might need help to pay for a wedding.
These are important questions to keep in mind when making financial decisions about how you manage your expenses. First and foremost, you need to ensure that you have enough money to live comfortably and have enough savings for those unexpected expenses.
What Expenses Should You Budget For?
It is recommended that you have a monthly budget to pay for living expenses. Also monitor your savings so you know you have enough funds available for unexpected costs. You want to be able to cover many of the same expenses you had prior to retirement.
Do you have a monthly budget to pay for:-
- Food
- Clothing
- Medical expenses
- Home maintenance
- Utilities
- Transportation
- Health insurance
- Travel and gifts
According to Fidelity, you should “expect to spend 55%–80% of your current income annually in retirement” and “Expect 15% of your living expenses to be related to health care expenses after you retire, year in and year out”.
Expenses like medical bills are unexpected for many seniors. It’s important to budget and have savings set aside to cover these costs.
Inflation is something to be taken into consideration and, 3% per year minimum is a good place to start. If you look at 2022, inflation is over 7%. Adjust your monthly and yearly budget for the cost of living.
Do You Have Enough Money Saved?
What are your options if you realize you don’t have enough money saved to cover your expenses and, you anticipate you have many more years of living?
- Make a list of your assets and decide what you can sell or live without to free up income
- You could sell your home and downsize
- Sell some investments
- Sell some valuables
- Reduce your living costs
What can you do? Asking for financial help from your family is typically not what most want to do. You can speak with a licensed Financial Advisor to help you determine your options.
One option many seniors don’t realize is that they can sell their life insurance policy in a life settlement transaction for cash. Your life insurance policy, in most cases is one of the most valuable assets seniors own and, can be sold for a lump sum cash payment. The advantages of selling a life policy can provide financial stability for the future and. an afford you the ability to maintain or improve your lifestyle with no financial stress.
The cash received can be used for whatever you choose!
- Pay medical bills
- Pay off debt
- Memory care
- Long-term care assisted living
- Go on the vacation you always dreamed of
- Do you want to move to another country?
- Help the grandchildren with college tuition
- …..or simply play tennis and golf at the country club
MRE Finance are Life Settlement Experts!
If the time has come where you need cash to live the way you want, consider selling your life insurance policy for cash. Talk to MRE Finance, the life settlement experts. Speak with a specialist by calling 1-800-521-0770. You can also find out the estimate value or your life insurance policy in minutes with the MRE Finance FREE life settlement calculator.
You could receive the cash payment in approximately 6-8 weeks. (timeline can vary based on your insurance company providing the required documentation).
Start your journey to financial freedom today with MRE Finance.
