For some, retiring is something to look forward to. It means freedom from work and living out the rest of your years in comfort. However, retirement isn’t as easy as it sounds, and many people struggle to set money aside each month for the future.
If you want to realize your dream and get the most from your retirement, financial preparedness is crucial. There are a lot of older people who still struggle with their finances well after they retire, but most of these problems could have been avoided with some planning. So what are the problems commonly faced by seniors, and what can be done to prevent them?
Paying off debt
It is not uncommon for seniors to retire with a significant amount of debt. This debt is usually the result of a lavish lifestyle, medical bills, or unexpected expenses that come along with supporting a family.
When most people retire, they are forced to live on a fixed income, which can make paying off existing debt impossible. If you have more than $50,000 of outstanding debt, you might want to consider life insurance. There is inexpensive term life insurance for seniors over 65 that can help your family settle any debt that you may leave behind.
Death of a spouse
When you are retired, the death of a spouse can pose a significant financial burden. If there are no funds set aside for final expenses such as medical bills, funeral expenses, and burial costs, you could find yourself struggling to secure the money you need to pay for these unexpected expenses. In addition, you could forfeit some of your retirement funding if your spouse collects a pension, or you could lose access to financial information like bank accounts and other assets.
Unwanted charges, product subscription, and fees
Bank employees are all too familiar with senior customers complaining about hidden fees and charges on their bank statements and credit card statements. Oftentimes, consumers inadvertently get enrolled in services or fail to opt out of services, which ultimately results in unwanted charges. It is recommended for any consumer to always check charges and report anything that may look suspicious or fraudulent.
Victimized by scams and identity theft
Unfortunately, seniors are commonly victimized by opportunists who steal their identity and credit information. When this happens, it is a difficult and time-consuming process to repair your credit and remove all negative information on your credit reports. This is unnecessary stress that can be usually be avoided by monitoring your credit or paying a few bucks a month to have a service do it for you.
Complications with mortgage payments
Seniors also face problems with reverse mortgages because of insurance and property taxes. Although you can use the home’s equity and delay payments, you are not exempt from paying taxes and insurance. For a senior on a fixed monthly pension, this situation poses serious difficulty. Falling behind on those payments may result in foreclosure. Because of these potential problems, most financial experts advise against reverse mortgages.