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Typical Financial Mistakes Made by Retirees

By Nikhil Mehta, 9:00 am on

While many in-home caregivers in Palm Desert, CA, find it challenging to talk to a senior that they look after about financial matters, family members should have frank conversations with their seniors. This is especially true if the individual spots the senior making one of these common financial mistakes after retirement.

Not Considering Tax Implications

Palm Desert, CA, elderly care professionals advise against withdrawing from social security all out. While seniors need to change their investment strategy after retiring, too many do not consider the tax implications. Taking your pension, for example, is often considered as income. Many seniors will find that taking withdrawals from their tax-deferred accounts, stocks, bonds and some mutual accounts may even push seniors into a higher income bracket.

Taking Social Security Too Early

As a general rule, the longer a senior can put off accepting their Social Security, the better off they will be. As of 2016, the average Social Security payment in the United States was $1,346 per month. If the senior can delay taking their Social Security until they are 66, then that average payment rises to $1,682. If the senior can delay taking the average Social Security until they are 70, then the average payment raises to $1,790 per month.

Owning Too Much House

Many seniors need to consider selling the family home. While it was a great place to raise children, now the senior is spending a lot of his or her income on taxes, utilities and even homeowner’s association fees. Many seniors find that they are much more comfortable when they downsize after retirement. This often gives seniors more money for things they want to do rather than throwing all their expendable cash on a place that’s simply too big.

Spending Money Too Quickly

Many seniors spend money too quickly after they retire. They fail to realize that the money must last their entire lives. Many make a large purchase shortly after retirement just because they can make it. Seniors are better off waiting until they have adjusted to retirement to see where their interests lay. Then, they can make purchases as their income allows.

Family caregivers who are not financial experts may want to consider having the senior meet with a reputable financial advisor to sort out these and other financial issues. Additionally, you might want to consider Home Care Assistance for help managing your loved one’s wellbeing. We provide flexible live-in and hourly home care Palm Desert, CA, seniors can trust to help them age in place while maintaining their independence. Call (760) 345-0001 today to learn more about our unique services and how we can customize them for your loved one.