People say retirement is equivalent to relaxation, but this is only true if you’ve prepared well. As you navigate retirement age, managing your finances becomes more crucial than ever. Here’s where financial resources for seniors can be of great help.
Financial resources for seniors
Social Security
Much of your retirement income now comes from your Social Security Retirement benefit. It’s based on your highest 35 years of earnings, with lower earners receiving a larger income share. On average, around 70.6 million Americans receive annual benefits. Maximize yours with these tools:
- Social Security Quick Calculator: This tool allows you to estimate your future benefits based on age and current earnings.
- My Social Security Account: Access Social Security online services and interact with your account. Creating an account gives you control over checking your statement, changing information, and reporting earnings with just a few clicks.
- AARP Social Security Benefits Calculator: This calculator helps you determine the best time to claim benefits based on your financial situation.
Retirement planning software
Saving for your future involves more than just Social Security. Planning for retirement contributes to a comfortable life even if you’re no longer working. Consider using:
- BoldIn: Formerly NewRetirement, this tool provides retirement forecasting and what-if scenarios, helping you assess the impact of timing and savings on your lifestyle. The free version evaluates your financial plan’s effectiveness.
- Empower: A combined investment and planning tool that analyzes spending, net worth, and savings by linking to your accounts. With a $100,000 minimum investment, it projects income from Social Security and other sources.
- T. Rowe Price Retirement Income Calculator: This calculator estimates your retirement outlook and suggests actions to improve readiness, allowing you to test different scenarios.
Investment management tools
An investment management tool can help retirees who rely on their assets for a steady income to build a secure financial future:
- Morningstar: This tool analyzes stocks, mutual funds, and exchange-traded funds and provides in-depth research on their pros and cons. It is incredibly helpful for value investors who want to understand the underlying principles of each investment.
- Vanguard: Vanguard manages your portfolio, including individual and joint taxable brokerage accounts, IRAs, and 401ks. It breaks down your asset allocation and warns you if the portfolio is diverging from its recommendations.
- Fidelity Retirement Score: This tool provides three scenarios – above, below, or average market conditions – to identify whether your savings can support your lifestyle in retirement. Various factors can affect it, but your expenses – including health care and other discretionary items – will primarily affect the fluctuations.
Expense tracking and budgeting apps
A common challenge among retirees is keeping expenses under control, with 25 million older adults suffering from financial insecurity. Budgeting tools will help prevent overspending:
- Credit Karma: Previously known as Mint, this free tool helps you track your income, spending, and savings goals. If you want to organize your financial data all in one place – including your credit score and net worth – Credit Karma is the answer.
- YNAB (You Need A Budget): YNAB’s budgeting methodology can feel novel, but it can be enlightening once you get the hang of it. It helps create proactive budgeting plans where every dollar is allotted toward something, making your money easier to track.
- PocketGuard: If you want a straightforward expense tracker, PocketGuard allows you to see where your money goes. You can see your monthly spending, and it analyzes your habits and suggests ways to cut costs.
Protection from scams and financial fraud
Seniors are often the target of financial scams, losing around $34,200 to them on average. This heightens the need to protect yourself from:
- Social Security scams: You may get fake calls claiming issues with your Social Security number, threatening to cut off benefits if personal information isn’t provided.
- Inheritance fraud: Solicitors inform “heirs” of an inheritance, leading the victim to send money to cover a supposed balance before the inheritance can be transferred.
- Reverse mortgage scams: Fraudulent lenders offer misleading home equity loans. These con artists prey on older people who sign up for a reverse mortgage loan, which withdraws the money from their home’s equity.
Here are fraud protection tools you can arm yourself with:
- AARP Fraud Watch Network: This free resource provides scam alerts and prevention tips.
- FTC Identity Theft Recovery Plan: A one-stop resource for victims to recover from identity theft. You can report the misuse of your information for fraudulent loans, credit card accounts, and government benefits.
- Equifax, Experian, and TransUnion: These top three credit bureaus offer free credit reports to monitor suspicious activity.
Learn more about scams and fraud targeting seniors with Seniors Guide
Tax assistance and deductions for seniors
Tax planning helps reduce liabilities and improve financial stability. Seniors with an AGI below $84,000 can use IRS Free File for free tax preparation. Programs like Volunteer Income Tax Assistance and Tax Counseling for the Elderly offer specialized tax assistance, especially for retirement-related concerns.
Key benefits include the Medical Expense Deduction for costs exceeding 7.5% of AGI and Senior Citizen Property Tax Exemptions. Working seniors can also make catch-up contributions to 401(k)s or IRAs to boost retirement savings.
Estate planning and will preparation
Proactive estate planning ensures assets are distributed according to your wishes and helps avoid probate delays. Almost half of American adults over 55 do not have a will, increasing challenges for bereaved families.
Essential documents include a will for asset distribution, a living will for medical preferences and a power of attorney for finances. Low-cost resources like Legal Aid for Seniors and AARP Legal Counsel for the Elderly offer expert guidance, while online platforms like Rocket Lawyer and FreeWill simplify will creation.
Maximize your golden years
Security in retirement requires careful planning, budgeting, and the right resources. By using the proper tools, such as these financial resources for seniors, you can maximize your financial stability. Remember to stay informed and seek expert advice when necessary to make the most of your retirement years.