The Importance of Financial Responsibility for Seniors

By the time most people reach their golden years, most have a history of being responsible both financially and societally. Most people approaching retirement should ask themselves; did I budget enough for retirement? and, have I been financially responsible to live comfortably? Here’s what you need to know about the relevance for seniors and finances

How 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

Many seniors are on a fixed income and some may have been unable to save enough to cover unexpected costs. People avoid thinking about unpleasant possibilities such the possible need for memory care, long term care in an assisted living facility, nursing home costs or medical bills. Often, the financial responsibility is assumed it will be covered by Medicare or family.

If you can support yourself to cover medical costs, have a home and can pay for other expenses, then you are in a good place. Having cash savings, and investments to rely can allow you to enjoy life and reduces the stress of worrying about how to pay for your needs. 

Does it Pay to Keep Spending to a Minimum?

Do you really have to limit your spending when you’re a senior? It all depends on how financially irresponsible you can afford to be.

There are other factors to take into account as well.

For example:

  • 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 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 and to ensure that you have enough money for yourself to live comfortably.  Plan to have enough savings for those unexpected expenses.

How Much Is Enough?

As a senior, you should have a budget and enough savings to cover many of the same expenses that you had prior to retirement.

Do you have a budget 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”.

Unexpected expenses, such as medical bills, always come up and have savings set aside to cover these is important.  Inflation should also be taken into consideration.  3% per year minimum is a good place to start and, if you look at 2021, inflation is 6%. Inflation takes many by surprise which effects everyone, so budget yearly for the cost of living. 

What if You Don’t Have Enough Finances? 

What options do you have if you realize you don’t have enough money to cover your expenses and you anticipate you have many more years of living?  Make a list of your assets is the first step and then decide what you can sell or live without to free up income. You could sell your home and downsize, sell some investments, valuables, reduce your living costs, but what if you don’t have these options?  Asking for financial help from your family is typically not your first option.  Speak with a licensed Financial Advisor to help you.

Naturally, some options are better than others. One option many seniors don’t realize is that they can sell their life insurance policy in a life settlement transaction for cash.  A 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 that hasn’t been considered, and afford you the ability to maintain or improve your lifestyle.  

The cash received can be used for whatever you choose! Pay medical bills, go on the vacation you always dreamed of. Move to another country or state, help the grandchildren with college tuition, or simply play tennis and golf at the country club. 

MRE Finance are Experts With Life Settlements

If the time has come where you need cash to live the way you want, consider selling your life insurance policy with MRE Finance. You can speak with a specialist by calling 1-800-521-0770 or find out what your life insurance policy is worth in minutes using the FREE life settlement calculator

You could receive the cash payment approximately 4-6 weeks. (timeline could vary based on your insurance company providing the required documentation). Talk to MRE Finance and you can enjoy you financial freedom sooner than you realize. 

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