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6 Money Management Tips For Seniors

There may be no other group more valuable to our society than the elderly. They have so much wisdom and life experience to share with the younger generation. They need to be respected, honored and taken care of as best as possible. 

There is something else though that seniors have over the younger generations. Generally speaking, they have more money. Good old-fashioned saving, budgeting and spending discipline has led many of them to accumulating a sizeable nest egg. 

Despite this, many seniors lack knowledge regarding financial decisions, despite managing their spending habits for years. Retirement is the phase of life that requires careful planning so that one can remain self-sufficient and live independently. It’s not the time for debts to continue piling up or for wild, spur-of-the moment spending to begin happening. If those were to begin and continue, it may damage their ability to care for themselves financially. 

Additionally, health concerns are a major factor in retirement, including the loss of some cognitive abilities. It’s reasonable to conclude that this is why scammers so frequently target this demographic. That’s all the more reason to be vigilant with managing money as one grows older. 

Other vital factors tied with retirement can take up a lot of a senior’s time. Managing money may be tricky for some, especially when juggling it alongside other responsibilities. However, it doesn’t have to be that way. Here are a few money management tips to help seniors.

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How Much Should You Save for Retirement?

Retirement is something every working person needs to think about, no matter how young they are. The simple reality is that, at some point in your life, you are going to have no income. You’re going to need a retirement fund for your basic needs. But how much money will you need?

Calculating how much you will need to save for retirement is difficult for a number of reasons. It is impossible to know just how prices will rise over the decades. Inflation is a real issue that can eat away at the spending power of your money. 

Additionally, you may need to buy technology that has not even been invented yet. Or you might end up supporting a family member or a child who isn’t able to get a job for whatever reason. And finally, you may have unanticipated large medical needs as you head later into life. All of these things make it a challenge to know exactly how much to save for retirement. 

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The Easy and Hard Parts to Becoming a Millionaire by Age 65

Would you feel financially secure if you became a millionaire? I’d say most people would. A million dollar net worth provides the cushion you’d need to weather almost any financial storm. Becoming a millionaire should set your financial worries at ease.

becoming a millionaireThat doesn’t mean though, that when you reach that milestone, you can live recklessly and spend money on whatever you want. Do that and you might find yourself broke before you know it.

Nor does it necessarily mean you can stop working. A millionaire at 75 can sit back and enjoy the fruit of their labor. A millionaire at 35 still has many more years of life expenses in front of them that one million dollars may not cover entirely.

Becoming a millionaire is both easy and hard. That may seem contradictory. How can something be both easy and hard? As you can see from the following graphs, the contradictory nature of that statement can best be viewed through three variables:

time, income and choices.

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Should I Save For Retirement or the Kid’s College First?

I’m a very linear person. My default mode is to move in a chronological order, doing things step by step according to a predetermined plan. So it’s confusing when trying to decide whether to save for retirement first or our kid’s college.

save for retirementOn the one hand, it’s been drilled into me that saving for retirement is important. However, I know the costs of college tuition are increasing every year with no end in sight. I’d love for my kids to graduate from college debt free and feel an obligation as a parent to help with some of my own money to make that happen.

College is a nearer-term goal than retirement. That fits with my linear life narrative. Prepare for the financial situations that are coming sooner and push off financial decisions that can be made later. For most people, college costs will come before retirement costs so shouldn’t we be focusing on that first?

It seems logical to prepare for college first but I’m going to suggest today that we should do the illogical. The exact opposite should happen. Save for retirement first and college second.

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6 Financial and Emotional Considerations Before You Retire Early

reasons to retire earlyThink you have some good reasons to retire early? It is exciting…the thought of leaving your career and setting aside the accompanying stress that it produces. In fact, you may already have begun to plan how you might be able to do that 10 or 20 years before your retirement benefits are available.

It’s a lofty goal to retire early. But it’s a decision you must be sure about. You can’t just wave a magic wand to make it happen.  It takes planning and deep consideration of all the financial and emotional reasons to retire early before you pull the trigger.

To that end, it would be wise to consider the following issues as they relate to early retirement. You may find after working through them that you want to hold onto that career for a few more years.

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4 Basic Strategies for Retirement Planning Everyone Should Know

The retirement years are one of the most rewarding and also potentially delicate phases of life. People experience many joys in their later years. However, they may also have to endure diminishing physical strength, slowing of mental faculties and the onset of age-related illnesses. Given the inevitability of health conditions in old age specifically, it‘s vital to keep the controllable factors in check to avoid exacerbating medical problems. This can be done with good retirement planning.

retirement planningPerhaps the most important such controllable factor is your financial stability. Money doesn’t equal happiness or freedom from sickness or other problems. However, the more funds you accumulate, the higher your chances of having a less stressful retirement when it comes to the financial side of things.

With that in mind, here are a couple of valuable tips for retirement planning that aren’t difficult to do but whose payoff is huge.

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Should I Retire Early? – 9 Questions to Help You Decide

What do the numbers 61, 65 and 73 have in common? You might guess they are the home run records set during various Major League Baseball seasons by Roger Maris (1961), Mark McGwire (1999) and Barry Bonds (2001) respectively. However, for our purposes here those numbers represent peoples ages. Specifically, the age they may be looking at to mark the beginning of their retirement. In fact, we could also put in numbers like 55, 50 or even younger as even people at those ages are asking could I or should I retire early.

Let’s just get this out of the way right at the beginning…clearly a person can retire at any age they choose. However, to receive full financial benefits from the Social Security Agency will require a person to work until a certain age (based on when they were born). For example, I was born after 1960, so full retirement age for me isn’t until age 67 according to the Social Security website.

I could begin to receive benefits as early as age 62. However, those benefits would come to me at a reduced rate. The calculation used by Social Security is based on the number of months once I retire until full retirement age is reached. In my case that would be 60 months if I retired at age 62.

Retiring early at age 62 sounds great. However, it would really cost me. It would turn a potential $1,000 benefit into only $700, a 30% reduction. $300 dollars a month would go a long way. The Social Security website has a great chart showing all the ages and reduction percentages.

So the choice to retire early isn’t a no brainer. In fact, there are many other things to account for aside from the financial considerations.

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Saving Up For Retirement – What Are Your Basic Options?

If you have finally decided to get on the right track to retirement, good for you. Better late than never, after all. There are a lot of people who have retirement accounts, as well as they should. However, there are far too many people who are either too lazy, too ignorant or don’t have the right retirement planning tools to get their accounts started.

There are many different retirement options open to you, the most useful being the IRA or individual retirement account. This is the account that offers the most control over your retirement funds and it is definitely something everyone should invest in.

The 401k Retirement Plan

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5 Innovative Retirement Planning Tools to Help You Save More

Enjoy this post on retirement planning tools by guest blogger Alfred Stallion.

retirement planning toolsOne of the key aspects of retirement is ensuring that you have sufficient funds in investments and cash to continue living comfortably for many years. By adhering to sensible investment principles and saving guidelines, this can be attained. Thanks to advanced technology and mobile apps, it’s easier than ever to know how much you need to retire, how much you have to save, and how aggressively to invest in order to lead a happy life in your senior years. Mobile app technology keeps progressing, and anyone with a smartphone can now keep track of his finances, and thus plan for retirement much more conveniently.

Here are several retirement planning tools to help you save more money along the way.

Retirement Planning Tools

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Beyond the Retirement Plan: 3 Things You Must Do Before You Stop Working

For many people, retirement planning means saving enough money to cover expenses after they stop working. Whether they sock money away into a 401(k), IRA, a savings account, or just stuff cash under the mattress, getting ready to retire is just about the money.

retirement planWhile having enough money to pay for housing, food, and other expenses is certainly very important, it’s not the only concern if you want to have a fulfilling retirement. There are several other issues to address before you say goodbye to the working world for a new life of leisure, which can make a big difference in how comfortable you feel — and your family feels.

So before you start planning your retirement party, make sure you’ve addressed these important issues.

1. How Will You Fill Your Time?

If you have spent the last four or five decades working, suddenly having your days free is bound to present some challenges. Not only will you no longer have your actual work responsibilities, but also your off-hours won’t be spent thinking about work, either. You might have images of traveling, spending more time with your family, pursuing a hobby, or other ideas, but do you really know how you will spend your days?

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Is There Ever a Time When You Shouldn’t Use a 401k?

In today’s post, financial consultant Dave Landry Jr. shares his thoughts on when best to invest in a 401(k). Enjoy!

401k interstate signFor decades now, the practice of squirreling away maximum contributions into a 401(k) plan has been a bit of received wisdom. A savings-account nest egg may be safe but accrues paltry interest, and social security is almost never enough to live on. However, a number of financial experts are now bucking this conception.

While there’s no doubting the solid security of a 401(k) for many consumers, in some cases there are better ways to maximize your retirement funds. In general, these situations are predicated on either the dynamics of your income tax rates or your potential need for an early cash out. Here’s a quick overview of when a 401(k) plan is and isn’t advisable.

For Tax purposes

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