You may have watched first-hand as a beloved parent’s money management skills went from smart to questionable. Scam artists take advantage of this, stealing homes and emptying bank accounts of trusting seniors. Research shows that as we age, certain skills, including financial savvy, diminish. The problem is, the seniors still think they are able to manage their money, despite all evidence to the contrary.
US News explains in “8 Ways to Safeguard Your Financial Life as You Age,” that folks of just about any age should take action when they’re young to protect themselves from financial errors later in life. We’ll look at a few of these.
Automate transactions. Automate what you can, like utility and mortgage payments, as well as required distributions from retirement accounts. Go with direct deposit for your bank account. Create a list of what you have automated and tell your heirs where it is. Continue to review your statements.
Set up bank alerts. Your bank may provide you with the ability to get an email or text alert in the event that your balance drops below a certain level. You can do the same thing for large credit card purchases, and bill due dates.
Keep your estate planning documents up-to-date and organize your important papers. First make sure you let someone know where they’re located. Create a list of your assets, collect your important documents and passwords and put them in a secure place, like a home safe or fireproof security box. Also inform one of your children or trusted friend of their location in the event you become incapacitated.
Simplify your accounts. Consolidate your financial accounts and close accounts that have only small balances, which gives you less to manage. Get down to just one credit card, so you have just a single bill to pay.
Don’t make any hasty decisions. Sales people can be pushy, so don’t make any big financial moves, like moving investments or buying a new car, without first discussing it with a trusted friend or relative.
Consider sharing information and access to trusted family members or your financial advisor. Having one or even two people who you trust implicitly involved in your finances may be helpful. By providing them with access to your accounts and information, you’ll have another set of eyes on your spending, investments and any kind of movement of assets. If they spot a problem or notice a trend, they will be able to step in to help before it’s too late.
For additional information on asset protection and estate planning in Houston, please visit our website.
Reference: US News (October 26, 2016) “8 Ways to Safeguard Your Financial Life as You Age”