Most of us have a family member over the age of 65. As of 2018, more than 52 million people in the United States are age 65 or older. In the back of our minds, we are all in some way preparing to reach this stage in our lives, looking forward to retirement.

However, older adults struggle financially more than many may realize. Believe it or not, nearly one in 10 older adults struggle so much with their finances that they live on or below the poverty line. This financial strain causes issues with the quality of one’s retirement and makes meeting health care needs increasingly difficult.

If you have older adults in your life, you can help them ensure they’re financially stable. Continue reading to learn more about helping seniors with finances and ways to avoid financial issues as you age.

Common Financial Issues Faced by Seniors

How do financial matters become so complicated for countless seniors? While everyone’s financial situation is different, many seniors encounter the same set of obstacles as they age. From health care needs to social security issues, there are many common financial issues faced by seniors.

A few common issues that affect older adults’ financial needs include:

1. Lack of Planning

Many people are unaware of the financial struggles they may experience in post-retirement life, so they don’t plan for them. In fact, more than 22% of Americans have less than $5,000 saved for retirement. Once retired, seniors can no longer rely on a job to pay for expenses. Therefore, they must rely on the plans they’ve made for retirement, whether that includes savings, social security, liquefied assets or a pension. Much of the financial strain experienced by the elderly is the result of poor planning.

2. Debt

The decisions we make as working adults will follow us into our retirement — and that includes any debt we may be carrying. Those over 50 years old collectively owe more than $335 billion in student loan debt in the U.S. Furthermore, mortgages, credit cards, car loans and other versions of debt can carry on through retirement.

debt can become a struggle for seniors once they reach retirement

When debt follows seniors, they may struggle to make their payments as they’re now likely relying solely on a fixed income. This also comes as a result of poor planning. Out of necessity, some seniors have started using credit cards to pay these debts, which only increases, or at best, stagnates the money that they owe.

3. Fraud

Unfortunately, seniors are a significant target for scammers, hackers and other bad actors trying to steal their money. These con artists rely on the good nature of the elderly to commit fraud by having them send them money or compromise their sensitive information, such as their social security or credit card number. One convincing phone call can lead to a senior mailing money to what they think is a good cause, only for it to be fraud all along.

This has become a substantial issue as technology continues to grow. These days, more seniors have access to smartphones, computers and other devices that connect them to the internet. As a result, bad actors have become more sophisticated, sending convincing scam emails and tracking keystrokes to learn passwords. In these cases, a senior may not even know that they’ve been compromised.

4. Social Security

Many seniors rely on social security to provide them with benefits to help reduce financial strain after retirement. It’s expected that social security funds will be exhausted by as early as 2037. As a result, older adults who plan to rely solely on social security may need to find other sources of income to sustain themselves through retirement. Having at least two reliable financial sources can set you up for success in retirement.

5. Loss of a Spouse

For many older married couples, losing a spouse comes with financial consequences. Some individuals experience trouble when trying to acquire assets that were in the deceased spouse’s name. This is especially troublesome if one spouse was the only one in charge of finances, as it can leave the living spouse struggling when they’re unable to access certain accounts. In some cases, they may even have trouble remaining in their homes if their reverse mortgage is in the deceased spouse’s name.

6. Increasing Cost of Health Care

As we age, we’re more likely to experience a myriad of health issues. Despite the existence of Medicare, out-of-pocket expenses still prevent many elderly individuals from receiving the level of medical care they need. From the cost of procedures to paying for devices like wheelchairs, medical insurance doesn’t always cover everything, so health issues can set seniors back financially in the blink of an eye in some cases.

Here are just a few health problems that can cause money issues for seniors due to the financial burden of health care:

  • Arthritis
  • Osteoporosis
  • Heart disease
  • Dementia
  • Obesity

These health issues are common among individuals 65 and older and can pose certain risks that may leave them vulnerable to injury, resulting in unexpected expensive medical costs. While you can’t plan for some medical issues, many expensive medical costs can be avoided with an in-home care provider, who can assist with minor medical needs as they occur.

Ultimately, planning for the potential financial burdens of retirement will help older adults ensure they stay afloat.

How to Avoid Elderly Financial Issues

Getting through money issues faced by seniors means friends and family must do their part to help. Taking the time to create a solid plan for the future will ensure your older loved ones are in the best position possible. This way, they’ll have a chance to enjoy their retirement.

Here are a few elderly financial advice tips you can consider to help the older adults in your life properly prepare for the future:

  • Create a financial plan: Be sure to have a dedicated retirement savings account that your loved one can use after retirement. Knowing whether you have a pension or social security is an important part of planning for the future, as well. There are financial planners or advisors available to speak to who can provide financial advice, assist with building your resources and talk you through steps you can take to give you financial security. Having important legal documents written and notarized is also a key part of planning for your future, as doing so can give your family the ability to care for you should anything happen.
  • Educate about fraud: Many seniors are victims of fraudulent activity. The best way to avoid a loved one falling for a scam is to educate them about common scam practices, what to look out for and who to trust. Helping them check their bank statements monthly will help them spot scammers or fraudulent activity sooner, saving them from being manipulated and allowing them to report it to the proper authorities.
  • Take care of important documents: Know where all of your important documents are located, so you can keep them safe and have access to them when needed. This includes documents such as a will, insurance policies, social security payments or car titles. Access to crucial documents will make matters easier should a spouse pass away or an older family member becomes incapacitated. Authorizing access to financial accounts in advance can be important in case an emergency occurs. It may also be beneficial to consider giving a trusted family member power of attorney so they can settle and assist with legal or financial matters in specific situations.
  • Prepare for the death of a spouse: If your loved one is married, you’ll want to ensure either spouse is financially prepared to deal with their spouse’s death. Take the time to organize all legal records and documents between them. It may help to hire an attorney to help you ensure the proper transfer of all assets after death. Additionally, you’ll want to ensure there’s money set aside to pay for a funeral and other related expenses for both spouses.
  • Set up a medical plan: A part of planning for the future means setting up health care plans that will benefit you or your loved one later in life. There are plans that exist purely to provide care to elderly individuals, and they should be applied for as soon as possible in order to get the most out of them. Be sure to research different providers in-depth to know what they will cover and what qualifications they may require.

This money advice for the elderly will help seniors get through or avoid any financial issues they may face once they retire and are moved to a fixed income. While even the most perfect planning can’t help you avoid sudden emergencies, organizing and maintaining your finances will ensure you can tackle issues as they arise. It can take only one hospital bill to put you behind financially, so it’s crucial to be prepared for anything. 

Funding Senior Care

invest in long-term care insurance to fund senior care

One of the best ways to ensure seniors are properly taken care of once they reach retirement is by investing in long-term care insurance. This type of insurance provides for you if you have a chronic health condition or require assistance in day-to-day life. Once you reach a certain age, certain tasks may become increasingly difficult, such as bathing or taking care of the home, due to health care needs. At this point, having an in-home care provider or transitioning to a care home may become vital to maintaining a high quality of life.

This insurance exists to make transitioning to in-home or out-of-home care easier, causing as little financial strain as possible. This type of insurance offers a broad range of coverage that should suit most needs. There’s some variance in policies, but most plans offer coverage for:

  • Nursing homes and 24/7 care
  • In-home aids
  • Assisted living
  • Home modification
  • Care coordinators
  • Senior care services and daily care

Generally, it’s a good idea to purchase long-term care insurance well before you need it to be sure it’ll cover what you need once you start to use it. There are certain qualifications older adults have to meet in order to be eligible to purchase long-term care insurance, and different providers will have different requirements. Starting early gives you the best chance to make the most of your plan’s benefits.

While there are no age restrictions for applicants, it’s recommended to start looking for policies when you reach your 40s. At this age, most applicants are accepted. However, you should note that as you get older, you’re more likely to be denied. In fact, individuals 70 and older are likely to be denied. This happens for the same reason older adults have to pay more for life insurance — as you age, you’re more likely to have health issues that your insurance must cover.

Applying while you’re healthy is a smart idea, as you’ll likely pay less for your monthly premium — and you’ll have your insurance ready when you need it. Additionally, you usually must have the insurance for a certain period of time before you can begin using it. That’s why applying while you’re young and less likely to have health issues is important.

It’s not always pleasant to think about the care we may need as we age, leading us to neglect the prospect altogether until our health becomes a significant financial burden. That’s why long-term care insurance can be a sound investment — one that you should seriously consider as soon as you reach your 40s, especially if finances are a concern. Doing so can foster the best financial outcome for you or your older family members as they reach retirement age.

Learn More About CareGivers of America Today

At CareGivers of America, we work with clients all over southern Florida to ensure the best quality care for older adults. CareGivers of America is dedicated to providing in-home and companion care for older individuals who desire to stay in their homes where they’re most comfortable, rather than be transitioned into assisted living or a nursing home. To help ease the financial burden of aging, we accept various types of long-term care.

If you’re looking for the best senior care South Florida has to offer, look no further than CareGivers of America. Live where you’re comfortable and contact us today to get a consultation at no cost to you!