Senior Financial Planning: Protecting Your Finances as You Age

It’s often said that you spend the first half of your life working to build wealth — and the second half trying to preserve it. If you are approaching retirement or are already a senior, now is the perfect time to review how you plan to protect your finances for the years ahead.

Work With Qualified Professionals

Unless you have professional expertise in financial planning, it’s wise to seek qualified help.

• Verify credentials: The Financial Industry Regulatory Authority (FINRA) maintains a helpful directory of professional designations at www.finra.org/investors/professional-designations.
• Plan for incapacity: Consider working with an attorney to formally designate a trusted person as your power of attorney (POA) for financial matters. POA laws vary by state, so review your documents if you relocate to ensure they remain valid.
• Create an emergency record: Write down a list of your financial institutions, account numbers, and other critical information and keep it in a secure but accessible location for your family or executor.

Develop a Spending Plan

Living on a fixed income means watching your spending carefully.

• Adjust insurance rates: If you no longer commute, let your auto insurer know — you may qualify for a lower premium.
• Set short-term savings goals: Use pension income or retirement distributions to fund holiday gifts, vacations, or emergencies without tapping your investment principal.
• Take advantage of senior discounts: Many retailers, service providers, and community programs offer special pricing that can help stretch your dollars.

Protect Yourself From Scams and Overspending

Older adults are often targeted by aggressive marketers and scams.

• Reduce unwanted calls: Join the National Do Not Call Registry at www.donotcall.gov.
• Monitor your statements: Review bank and credit card statements monthly to spot fraudulent charges or unnecessary subscriptions that you can cancel — this alone could save you hundreds per year.
• Guard against identity theft: Check your credit report annually at www.annualcreditreport.com. This free report can help you catch errors that might raise your interest rates or reveal signs of fraud.

Be Smart With Debt and Credit

• Avoid predatory loans: Be cautious of offers that advance you part of your pension or Social Security benefits — these are often high-interest loans that can trap you in debt.
• Pay credit cards in full: If you use credit, pay balances off each month and consider cash-back cards for groceries, gas, or other essentials.
• Be cautious with reverse mortgages: These loans can erode home equity and reduce what your heirs inherit. If you do use one, ensure your spouse’s name is on the documents so they can remain in the home if you pass away first.

Consider Additional Income — Carefully

If you have a hobby, special skill, or professional expertise, you may be able to create a supplemental income stream through consulting, crafting, or teaching. This can be a great way to stay active and purposeful, but be mindful that extra income can:

• Affect your taxes
• Increase Medicare premiums
• Temporarily reduce Social Security benefits

Consult a financial planner or tax advisor before starting a new income source.

Review Financial Products Thoughtfully

If you are considering purchasing an annuity or another financial product to boost your retirement income:

• Choose a reputable company
• Understand the terms fully
• Work with a trusted financial professional to determine if the product fits your needs

Major asset shifts should be considered carefully, as they may affect your estate plan, tax obligations, and eligibility for benefits.

The Bottom Line

Smart financial planning is about learning to spend less, protecting what you have, and preparing for the unexpected. Working with professionals you trust can help you create a plan that preserves your wealth and reduces stress for you and your family.

Ready to get started? Call us at (207) 848-5600 to schedule a consultation and discuss your financial planning options.