Financial Education for Older Adults

By Stephanie Lo

Financial decisions are the most critical for adults 50 years old and beyond. No longer are decisions as simple as saving money and deciding where to invest. Instead, older adults must make choices that will impact the rest of their lives. Critical questions demand answers: "Is there enough money to support me for the rest of my life?" "When can I use funds from retirement accounts?" "When should I collect Social Security?" But unfortunately, society often focuses more on educating the younger generations about their finances. Older adults may be wise in the ways of the world, but that doesn't mean that they don't need available financial education. Financial education for both today and the future is crucial. Start now and make the most out of the future.

Social Security

In 1935, President Franklin Roosevelt implemented a plan to help the citizens of the United States escape the financial burdens of the Great Depression - Social Security1. Social Security is a program that pays out money to citizens for: retirement income, disability income, death and survivorship benefits, Medicare and Medicaid services. Every citizen of the United States is assigned a Social Security number. Once that individual is of working age and begins to work for an employer, they start to accrue Social Security funds that are held by the government until needed. Retirement benefits can start as early as 62 years old and as late as 70 years old 2. The amount a retiree receives depends on how long they have worked and how much they have contributed to Social Security over the years.

Investment decisions

There are differing opinions on how someone should invest when they are older; some claim that retirees need to be more conservative, while others suggest that older investors become more aggressive. It can depend on how investments have been handled in the past and how much one's account needs to grow. The more money a retiree has saved, the less risk they may need to take in investing. However, it can be prudent to diversify investments to lower the risk no matter how much an individual has saved. Older adults should carefully consider their risk and invest in a way that they can handle both financially and emotionally.

Retirement paycheck

If investments are planned correctly, investors should have a variety of accounts such as annuities, IRAs, pension plans and more that they can pull funds from. But every year, individuals should review the amount they plan on withdrawing and consider factors such as health, life expectancy and personal need along with the remaining balance. If a retiree plans well, they can expect to receive a retirement "paycheck."

Health and long-term care insurance

Health and long-term care insurance are expenses that often get overlooked when planning for the future. Not only do insurance rates generally increase as one ages but the possibility of long-term care needs typically rises as well. Although Medicaid and supplemental insurance can be options, it may be important to find an insurance provider that will meet your health needs as you age.

The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of OneMain. The information in this article is provided for education and informational purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness or fitness for any particular purpose. The information in this article is not intended to be and does not constitute financial, legal or any other advice. The information in this article is general in nature and is not specific to you the user or anyone else. The author was compensated by OneMain for this post.

1 https://www.ssa.gov/policy/docs/ssb/v66n1/v66n1p1.html
2 https://www.ssa.gov/planners/retire/agereduction.html