As people age, they must start to think about their finances differently. While a younger member of society might start thinking about purchasing a house, an older adult may need to think about selling theirs. Plenty of different needs arise as people reach an older age, causing them to rethink their financial plans and make some necessary changes. There are at least five necessary changes to consider when it comes to finances.
The types of home modifications needed change drastically as people get older. Younger adults might simply want to renovate their kitchen or paint the walls. Older adults need to start thinking about mobility assistance and making changes to their home that will help them live safely alone. Stair lifts, elevators, assist chairs, bathroom aids, and more need to get considered, all of which come at a cost. To get the best lift assist chair and other mobility equipment, a great deal of money will be needed to have it properly installed so it works safely.
Elderly people often require a considerable amount of care. This needs to be considered when thinking about finances, as it can cost a great deal depending on the type of care received. While one person may be able to get by with home care visits a few times a week, another person may need to get moved to a nursing facility with round-the-clock care. Living in a facility has a far higher price than receiving care at home periodically.
While younger generations may cut costs by skipping the movies once in a while, older generations can let their insurance agency know they are no longer driving daily. This often takes a significant amount off the price. Spending less on extravagant gifts for others could also help, as well as cutting back on certain memberships and eliminating credit cards.
Power of Attorney
Many older adults suffer from some sort of memory loss, especially as they reach into their 80s and 90s. Those who develop Alzheimer’s or dementia are at an even greater risk of having memory problems and therefore trouble with finances. They won’t remember which bills to pay by which dates and perhaps even how to pay those bills in the first place. Before this stage is reached, it is imperative they sign a Power of Attorney giving someone else the right to speak for them. That person, often a trusted family member, will then be able to handle all bills and other payments without the owner needing to make any decisions themselves.
Loss of Income
Above all else, a loss of income is one of the greatest considerations to take into account. Those who work receive a typical paycheck, often weekly or every other week. They can use this money how they please toward bills, entertainment, extracurriculars, or otherwise. The more a person works, the more money they can bring home. Once someone retires from their job, they no longer receive this type of income. They may be able to draw social security or receive money from a 401K plan, but this often comes at a fixed rate that cannot be changed with overtime hours and commission as from working a job. People often experience a significant loss in income that makes their finances tighter than ever before.
Senior citizens have many financial changes to consider. While the future can still be thought about, it is a far shorter future than younger generations face. A loss of income leaves many people struggling to make ends meet, while a loss of memory leaves them struggling to know what finances they even have. With a fixed income and a power of attorney to handle all finances, the decisions of home modifications, elderly care, and where to cut costs can be made with a clear mind and easier time.