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.
- What is Social Security?: This site provides a clear picture of what Social Security is and answers many questions people have about these benefits.
- Understanding the Benefits of Social Security (PDF): The United States government has compiled an outstanding guide to Social Security benefits and has published it here.
- When Should You Take Social Security?: Understanding when to draw Social Security is critical and this site provides great insight into the matter.
- 12 Reasons Retirees Draw Social Security Early: For those who are considering drawing Social Security early, check out these reasons why people do it.
- 20 Things You Should Know About Social Security: This page touches on important things everyone should know about Social Security.
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.
- Ultimate Guide to Retirement: How Should I Invest the Money?: This site provides information on how to invest money for retirement.
- Make Sound Investing Decisions at Any Age: Get advice on strategies for investing here.
- Late to the Game? How to Ramp Up Retirement Investing in Your 40s and 50s: If the time between now and retirement is quickly approaching, check out these tips on how to increase investing power now.
- How to Make a Million After Age 70: This site offers advice on investing aggressively to increase wealth.
- Investing in Retirement: Here is a tool to help future retirees calculate how much money they will need to retire, how much they can withdraw and where to draw the funds.
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."
- How Should I Use My Employer Retirement Plan?: Discover retirement plan options here.
- How to Estimate Your Lifetime Retirement Paycheck: This page provides information on how to calculate current funds and needed funds for one's retirement years.
- Three Ways to Get a Steady Paycheck Long After You Have Retired: Learn how to receive a monthly "paycheck" after retirement from this page.
- Build Yourself a Solid Retirement Paycheck: The site offers advice on how to set up your retirement finances.
- Three Steps to Help Build Your Retirement Paycheck: You can use these steps to help plan for a stable financial future.
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.
- Understanding Long-Term Care Insurance: Check out this page for information on what long-term care insurance is and how it can help.
- Health Insurance and Elder Care: Getting the Most From Your Benefits: Understanding long-term care insurance can be key and this page offers some advice.
- Obama Health Care Reform Helps Seniors: Find answers to how health care reform has affected seniors on this site.
- Paying for Long-Term Care: This page provides suggestions for how someone can afford long-term care.
- Supplements and Other Insurance: Look at this resource for understanding retiree insurance options.
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.
