Helping Aging Seniors Stay Afloat in Choppy Economy

 

By Jon Flynn

 

Strong economic winds are blowing hard against the finances of our elderly population.  Many seniors whom had retired on a fixed income years ago are barely keeping their heads above water in today’s tough economic environment.  This may come as a surprise to many of the people closest to an aging senior. Why?  Well no one wants to burden or worry others with their problems - especially their own children.  So they put on a good face.  Also some people are just too proud at times to say that they could use some help in righting the ship.

 

Be aware of the challenges.  Low interest rates:  Low interest rates equal lower interest payments on bank accounts and fixed income investments. In other words, this is a “pay cut” on supplemental income.

 

 Investment losses:  Losses on retirement accounts, mutual funds, and securities in general equal lower financial security.  Savings is usually where the money comes from for big expenditures like a new roof or a new car. 

 

Declining home value:  Lower home value means the amount of a home equity loan would also decrease if needed.  Also if you were considering a reverse mortgage your potential income stream will be lower too. 

 

Rising prices:   While prices on agricultural products and energy have come down somewhat in the last year, they are still plenty high compared to years ago when someone may have retired. This translates in to less money to cover bills.

 

Offer solutions.  Create more income:  You can consider ideas like the following – a reverse mortgage, changing investments into higher income products, and single premium immediate annuities to name a few.

 

Lower expenses:  Possibly downsize your home to a smaller one or consider renting as an option. Now that your assets and income may be lower, aid programs where eligibility was declined in the past can be revisited.  Make sure that an aging loved one understands that it’s o.k. to cut back on gifts to kids and grandkids during these tough times.

 

Continue to monitor. Once you’ve made any changes, it’s important to continue to monitor their finances to make sure things have improved.  Go slow.  It’s o.k. to implement changes in phases until you get your desired result of being soundly in the black.  Once it took me a year and a half to get an elderly person’s finances stabilized because they were so set in their ways and reluctant to change.

 

Everybody’s situation is different and arriving at solutions can get complicated.  So always consult with financial, legal, and tax professionals before making any decisions.

 

 

Jon Flynn is a Certified Financial Planner ^TM and owner of Flynn Financial in Eynon. He is a Representative of Securities America, Inc., Member FINRA/SIPC and of Securities America Advisors, Inc., a SEC Registered Investment Advisor. Flynn Financial and Securities America are unaffiliated.   Mr. Flynn can be reached at 570-876-5015.