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By Ivan Serrano
Published January 5, 2023
The costs of being a senior or retiree in the US continue to rise. At the same time, poor financial literacy remains a crucial issue plaguing people of all ages, including older adults.
The good news is there is always time to improve your financial literacy, and to improve your financial health. With dedicated time and effort, most of us can improve our financial security and comfort. This short guide outlines simple financial planning and money-saving tips to help seniors manage their finances.
It is never too late to save money to support your retirement. By learning financial literacy strategies, you can increase your savings even without a steady source of income. Check out these three strategies that can help you save more after retirement.
Various government agencies offer money-saving benefits programs for retirees and older Americans. If you want to save money, you should check if you are eligible for the following programs.
And for even more programs to check out, the National Council on Aging has a “Benefits Check Up” program here.
Medicare serves as a federal health insurance for Americans 65 years old and above. Younger people with disabilities can also apply for this program to pay for expensive medical bills.
However, Medicare is not free, and miscellaneous medical costs can accumulate quickly, especially for older adults with chronic conditions. You can apply for the Medicare Savings Programs (MSPs) or Medicare Buy-In Programs to save money on these expenses.
Under these programs, seniors can use state-administered benefits to pay for certain expenses such as monthly premiums, copayments, deductibles, and coinsurance. Eligibility and the benefits you can apply for vary depending on your location.
The Social Security Administration (SSA) and Centers for Medicare & Medicaid Services (CMS) offer the Extra Help program to help seniors pay for prescription medications. Under this program, older adults with limited income can lower the medical costs that Medicare insurance may not cover.
The Extra Help program also offers limited out-of-pocket costs at the pharmacy and zero premiums on Medicare Part D prescription plans.
Paying bills can be a headache, especially for older adults who live alone. They have to pay rent, electricity bills, and other utilities. Some even opt out of heating or air conditioning to save money.
If you need help paying for heating or cooling systems for your living space, check if you’re qualified for the Low-Income Home Energy Assistance Program (LIHEAP). The program aims to reduce the risk of health and safety issues that arise from unsafe cooling and heating conditions.
You can get relief to pay for certain energy-related repairs, home energy bills, and specific weatherization projects. You can also seek emergency financial assistance under LIHEAP if facing a shutoff.
SNAP is the country’s largest domestic nutrition and food assistance program for low-income citizens. In 2022 alone, the program served food to an average of 41.1 million people per month, or 12.3 percent of US residents.
The numbers prove that SNAP is a vital lifeline for the American people, young and old. The program supports the government’s goal to combat malnutrition, hunger, and the stress of being unable to put food on the table.
Moreover, it helps many seniors stretch their budgets for food. Older adults can apply for the program to get a monthly stipend they can use at select farmers’ markets, grocery stores, and other retail food stores.
According to a 2022 report from the American Association of Retired Persons (AARP), the elder financial exploitation rate has more than doubled since the start of the COVID-19 pandemic in 2020. The report proves that more elderly Americans are becoming vulnerable to financial fraud.
To address this issue, seniors must become more vigilant when handling their finances. Common financial scams targeting seniors today include:
Robocalls are scams that typically involve the deceptive “Can you hear me?” call. This method targets older adults who have had their credit cards stolen. Fraudsters call older adults and record affirmative responses they can use as voice signatures. Then, they use the recording for unauthorized charges to the stolen credit card.
Robocalls may also pose as reputable organizations or falsely claim expiring warranties through number spoofing.
Some scammers pose as members of the Internal Revenue Service (IRS), Social Security, or Medicare officials. These criminals threaten older adults with deportation, arrest, or benefit cutoffs unless they provide immediate payments or personal financial data.
Fraudsters who use tech support scams exploit some older people’s limited knowledge of technology. This scam involves sending fake device damage warnings and telling victims to call for professional IT support. Then, the scammers request remote access or demand payment for unnecessary repairs.
Older Americans should remember that legitimate tech support professionals do not proactively reach out and only offer their services when requested.
The best way to avoid scams is to stay informed and be cautious. Be wary of unsolicited messages and verify before giving out personal information or making payments, especially online. When in doubt, do not think twice about consulting security experts for guidance.
Sweepstakes scams involve scammers telling older adults of fictitious lottery winnings and demanding associated payments for alleged taxes and fees. Perpetrators impersonate well-known organizations to get the victim’s trust but never deliver any prize. They can also coerce seniors into sending more money with false promises of winnings.
Recent data shows that between 2019 and 2020, the amount of unpaid medical bills among seniors rose by 20 percent, increasing from $44.8 billion to $53.8 billion. The figures show that unpaid medical costs remain a pertinent issue among seniors. They also highlight the importance of improving the financial literacy of older adults in the country.
Paying debts can get more challenging as you grow older, so you must have a strategy to manage your debt after retirement.
If you are struggling to pay your medical bills on time, you should start exploring your options, starting with the following:
The first step to paying all your medical bills is to request an itemized bill from your healthcare provider, including all associated fees and other expenses. Review the documents carefully and check for errors like a duplicate charge or service you did not request or receive.
Next, compare the bill to any explanation of benefits (EOB) from your insurance company. If you have Medicare, you should review your Medicare Summary Notice (MSN) thoroughly. This way, you can be sure that everything covered by your insurance has already been paid.
You can also check if you are eligible to receive financial support to pay for your medical bills. Under the Affordable Care Act (ACA), nonprofit medical institutions must offer free or discounted services to those struggling to pay their bills.
If you are sure your bill is accurate, talk to your provider to see if you are eligible for a low- or no-interest payment plan. Some medical institutions may accept a lower total amount if you can pay a large deposit and then contribute the rest of the payment over a period of time.
If you have unpaid medical debt, you can hire a medical bill advocate to review your bills for accuracy and negotiate on your behalf. While it costs money to hire a professional, doing so can be worth it if you have a substantial amount of medical debt. Make sure any medical billing advocate you hire is reputable — the AARP has more tips here on how to do so.
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It is crucial to remember that cutting your lifestyle costs is still the best strategy for staying financially stable, even after retirement. Fortunately, there are several simple ways to be debt-free even after leaving the workforce.
One effective way is to trim your spending. You could even look for a roommate at a similar life stage, or save tens of thousands by moving to a new state or city where the cost of living is more affordable.
Senior discounts can also help you save, so inquire when you are eating out, shopping, or even going to the movies. Some pharmacies even offer a 30 percent discount to older customers.
You should also look for brands with specialized products or services for older adults. For example, some wireless phone companies offer affordable plans for seniors. These plans can be available to AARP members and come with specialized customer support.
By considering these suggestions, you can save more money without sacrificing your quality of life.
Effective financial planning can go a long way, especially if you have no source of income after retirement. Moreover, aging increases risks with financial management that you may not be ready to address. It is crucial to be prepared so you can be in a good place financially as you age.
Ivan Serrano has been been a technology and business writer since 2015. He is obsessed with our constantly evolving fast-paced society and finding ways to teach readers something new. He has worked with companies like SmallBizClub, StartupNation, Namecheap, Time Doctor, and Searcheye—which has a business relationship with FairShake.
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