Estrategias para retiro cuando se acercan los 70 años24 de February de 2023
Tips financieros para mujeres mayores de 50 años10 de March de 2023
The vast majority of the articles focus on giving strategies for those people who are just beginning to think about their retirement. But, there are few Youtube posts or videos that create content for those who are already approaching 70 years of age and, they want to know some strategies for their retirement.
So here we have made a summary of the points that you should review regarding:
- Social Security.
- Strategies for your investments.
- Probate forecasts.
- Scams and debt management in the elderly.
The retirement benefit provided by Social Security
Various studies show that each year you wait to increase this benefit by 8% yearly on average.
But suppose you are already reaching 70 years of age, and you have not applied for your Social Security. In that case, this is the moment, considering that the amount you will receive for this pension will not continue to rise after this age. And it doesn’t matter if you’re working.
If you keep working and the amount you earn becomes higher than the income you have produced in the last 35 years. Social Security checks again yearly if your average goes up and will pay you an additional amount if it applies.
In the same way, it is essential to remember that these benefits are adjusted for inflation each year under a factor called Cost-of-living adjustments.
And if you have not applied for Medicare and are over 65 years old, It is good that you do it remembering that the more time passes, the higher the penalty.
The experience with our customers for so many years; shows us that it is not necessarily true that you have to lower your risk exposure as you get older. Instead, we have seen that the composition of your investments and their risk levels depend more on all those other factors; that affect your family or personal finances.
What is certain is that each portfolio must adjust to the financial goal for which it was created; For example, if you are saving for your grandchildren’s education, you know that the level of risk may be higher. If, on the other hand, you want to receive an income and you have no other source of payment other than the check that you are going to receive from Social Security.
Likewise, it IS very different if the person wishes to leave a legacy for future generations.
It is there where advisors and financial planners use a methodology called: “risk profile” to understand the client’s current situation, estimating when and how much money the person will need. And from there, suggest the mix of assets that each portfolio should have.
Within this same analysis, the different types of accounts that the client has must be taken into account, such as those with tax benefits versus those that do not have these benefits and if they are subject to minimum withdrawal conditions at a given time by law.
Strategies in probate issues
Of course, nobody likes to talk about this kind of thing, but much worse is to think that you will always be there and not start to review. Where you see if it is more convenient for you to have a will or a trust; and if you must accompany these measures with financial powers in case something happens to you. Maybe you have money in your bank accounts, but they can’t mobilize it to pay for the clinic.
Likewise, a power of attorney to make medical decisions, called “HIPAA Authorization,” without which your relatives will not even be able to know about your case if you have a medical emergency, much less make decisions.
Strategies to be even more careful of scams
According to the report of Scams in the Elderly issued by the FBI, These cases have been growing alarmingly; in 2021, more than 92,000 victims over 60 were registered. And the amount scammed grew by 74% compared to 2020, reaching almost 1.7 billion in losses. On average, each of these victims lost about $18,246. The states with the most cases were first California, followed by Florida, and then Texas.
The cases where more scams occur are;
- Frauds of people who seek to play with the feelings of these people adding up to $432 Million in losses in “Romance Scams.”
- Cases of false investments where the amount reaches $239 Million.
Particularly in the case of investment fraud, the arguments are always the same; a very high performance guaranteed and claiming that they have no risks.
If you want more tips to protect yourself from these scams, we have written this article, especially about it, and you can read it by clicking here.
Strategies to get out of debt
One of the most urgent measures you must take is to get out of credit card debt; many people in retirement living with a fixed income from Social Security and their investments and with these higher inflationary levels. Some people see no way to cover those missing amounts besides a credit card.
But, all of this can compound the problem because we also know that credit card rates are at all-time highs; and they could fall into quicksand from which it will be complicated to get out.
According to an article published by the National Council on Aging, some retired seniors have a monthly shortfall of about $4,000, and 41% of people between the ages of 64 and 74 have credit card debt. I remember that this percentage was 27% in 1989.
According to a study published by Debt.org, 46% of bankruptcies are due to health conditions. Being the category with the most injury or illness cases, or simply medical expenses not covered by insurance or for not being able to attend work for these reasons described above.
So your best investment will always be to get out of credit card debt and personal loans.
Leaning on a specialist to give you a second opinion
In a study called “The Age of Reason: Financial Decisions over the Life-Cycle with Implications for Regulation,” two members of the Federal Reserve. And a study from NYU Stern School of Business; shows us how, as the years go by, we are more prone to making financial mistakes.
So the scheme of managing your finances under the methodology of “Do-It-Yourself”; does not seem to be the best when the years go by. And waiting until you’re 80 to look for a CERTIFIED FINANCIAL PLANNER doesn’t make much sense.
The world of personal finance is becoming more and more complex; We already see that regulations that have stayed the same for many years are changing, as is the case with all the modifications that the Secure Act 2.0 brings. And those that will come into the world of Social Security, since we know that its current scheme is not sustainable over time, taking into account that life expectancy will continue to rise. There will be an increasing number of retirees.
Confidence in a Certified Financial Planner is a gradual process, as in any selection process, it is about trying little by little and particularly the new hourly work schemes, without being asked that you have to have thousands of dollars invested with them instead; they charge you for the work they do.
From what we see, the path is clear to start soon.