1. Introduction
As a member of the senior citizen community, you are entitled to certain financial benefits given by the government as well as private sectors nationwide. No matter your location, gender, orientation or race, if you are a United States citizen age 65 and older you qualify for the benefits that are reserved for seniors. With these benefits come certain, specific details that should be known in order to avoid unforeseen issues in the event that something unexpected should occur.
This resource will help you receive additional information on a number of topics that are imperative in the senior citizen community.
- Senior Discounts - As a senior, you are entitled to some great money saving opportunities and discounts on the products and services that you use the most.
- Retirement Planning - Being able to have financial freedom and live off of your retirement savings is one of the greatest benefits of becoming a senior citizen. Prudent and wise planning can help you enjoy a worry-free retirement.
- Social Security - If you are retired and over the age of 65, you are eligible to receive money each month from the government. Social security benefits are available to those who apply and qualify for monthly assistance.
- Home Ownership - Owning a home is one of the best ways for seniors to be financially independent. Find out the best ways to pay off your mortgage quickly.
- Medicare and Health Benefits - The government provides great medical and health benefits for seniors. Find out what they cover and how you can increase your coverage cheaply and easily.
- Senior Finance Myths and Realities - Some of the most common misconceptions about seniors and finance are debunked here, with facts to back them up.
2. Senior Discounts
Senior discounts are commonly offered at almost every place of business. While the discount amount varies from location to location, it is not uncommon for business to offer discount of at least 10% to seniors. While this isn't a huge amount, you will be surprised to find how much you can save over the course of a year. Small savings everyday can add up to thousands over a 12 months period.
Executive editor of AARP the Magazine said, "The savings is something that you've earned, and in this economy, there's nothing wrong with being smart about it." Some of the best places to ask for senior discounts and save big are as follows:
- Travel. Airlines aren't the only companies that offer discounts on fares. While Southwest and United offer discounts for seniors, rental car companies can help you save big as well. Budget gives a 20% discount, while Avis, Hertz and Alamo provide 25% off. National rental car comes in first with a whopping 30% discount on cars for seniors. Don't want to fly? Amtrak offers 15 discounts for travelers age 62 and up and usually have even better seasonal deals for seniors in various regions.
- Hotels. With all that money being saved on travel fare, you can afford a nice hotel. But why stop the savings there? Best Western Hotels offers a 10% discount to guess 55 and older, and Hyatt offers a huge 25-50% discount to seniors 62 and older.
- Fitness. Many gyms offer large discounts to their senior members. Bally's Total Fitness and Gold's Gym both offer saving between $50 and $100 annually.
- Clothing. Many department stores and other clothing retailers offer discounts for customers age 50 and up. Be sure to ask about their available discounts when you make your purchases.
- Haircuts. Many salons offer discounts to customers age 60 and up. Supercuts offers $2 off their haircut services, and MasterCuts offers 20% off all salon services and products.
- Entertainment. Movies and museums offer several discounts to seniors. Regal theaters offers 30% savings on tickets for guests over the age of 60. Many museums offer discounts to seniors, and theaters and other entertainment groups are offering discounted matinee tickets for seniors as well.
- Restaurants. The food industry is one that offers the most discounts. While none of the locations will advertise their discounts, all you have to do is ask. Normal rates vary between 10 to 20% off, so make sure that you don' forget to ask.
3. Retirement Planning
Retirement planning is a great way to ensure that you have enough money to last you during your senior years. With social security running out and baby boomers starting to retire, it isn't wise to place your financial security on a social security payment. The best way to plan for retirement is through your work if they offer a 401K savings plan. Take advantage of whatever plan is offered, and if your employer matches your personal contributions, make sure you max these out each year. If you don't, it's the same thing as leaving free money on the table.
If you are already at the age of 50 or above and haven't prepared for retirement, you have very little time left to try to save as much as possible. If you have any additional expenses that you can get rid of, do it and save the money each month. Cable, subscriptions, memberships, extra vehicles, boats, homes, etc can be cancelled or liquidated and the money that would be spent on them each month can be placed in a high yield savings account, money market or mutual fund. These are generally invested more aggressively and will bring a higher yield or return on your investment. If you still have 5-15 years before you retire, you will be cutting it close but can still save some good money if you work hard. You may need to work part-time during your retirement to continue bringing in money to keep yourself afloat. If you have not been preparing for retirement over the course of your employment, you will not have enough saved to retire completely when you turn 65. One option that is very popular is to delay retirement for five years. If you can delay retirement for this time and max out contributions to your 401K , you will have almost 25% more in savings in your retirement fund. Many people don't want to retire at age 65, and staying in a full-time job brings them peace of mind and keeps them busy as well.
4. Social Security
Social Security is a government run program that is funded by the working and taxpaying citizens of the US. Each employed person has taxes and deductions automatically withdrawn from their paychecks, and social security is one of the deductions. These funds are managed by the government, and checks are mailed to the disabled and elderly each month so that they can pay their bills. The idea is that the younger generation pays for the older generation, and then as they get older, the next younger generation will start working and contributing and pay for the older generation. Social security benefits are paid out based on an individual basis. The amount that you receive when you are eligible for benefits depends on the amount that you earned and contributed when you were working. The more you contribute, the more you receive.
Because the system was losing money, the government has revamped the Social Security system overall. Only those who earn enough points and are eligible for the benefits will now receive them. In order to qualify, one must work for a minimum of ten years and earn 40 total points. Points are given out one for every $1,120 you earn each year, with a maximum of 4 points a year. Under this qualification system, just about everybody will still qualify, but there are some who turn 62 and shouldn't be receiving benefits that do. Benefits cannot be collected until you reach the age of 62.
To apply for social security benefits or to learn more about qualifying or any answers to additional questions, visit http://www.ssa.gov/.
5. Home Ownership
As a senior, you have probably lived in many different places throughout your life. You may have had several homes, or you may have lived in the same place your entire life. Whatever the case, owning a home is one of the best ways to become financially secure as a senior. Paying rent or a mortgage each month is one of the fastest ways to drain your savings. In addition, owning a home is the best way to build long term equity and create security. Even if you lose your job, if you own your own home, you will always have a place to live. In the event that you are completely in need of money, you can always sell your home and have a large amount of cash available to help with your financial issues.
If you currently own a home free and clear, congratulations. You are one step closer to being completely financially independent. If you still have a remaining balance on your mortgage, work to pay it off as quickly as possible. There are some ways that you can pay off your home and save money.
- Put more money towards your mortgage. Instead of adding extra money to your savings account or retirement fund each month, take that money and put it towards your mortgage. Paying off your mortgage should be a top priority. Even if you pay just a few hundred dollars more each month, you could pay off your home years before your mortgage is up and will save yourself thousands of dollars on interest payments.
- Refinance your home. Because interest rates are so low, you can easily refinance your home and get locked in to a lower interest rate on your mortgage. If you are paying more than 5% interest each month, you should seriously consider talking to a mortgage lender and seeing if they would be able to refinance your loan at a lower rate. This will save you hundreds of dollars each month and will allow you to take that extra money and use it towards paying down the principle on your home and not interest payments. This will allow you to pay off your home more quickly and at a cheaper price than originally expected.
- Selling your home. If you are retired and live in an expensive city or state, you might consider selling your home and moving to a location where it is cheaper to live. Many cities are in huge unemployment crisis right now and have hundreds of empty, foreclosed homes that are for sale through banks for a fraction of their original asking prices. If you don't live near family or relatives and moving is an option, consider selling your home and moving to a cheaper location and pocketing the extra money.
The government has several programs set up to help seniors stay in their homes and maintain their financial freedom. There are special reverse mortgages available just for seniors, special rural housing loans, and in-home assistance for those who need it. Additionally, there are FHA loans and FHA refinances available that are insured by the Federal Housing Administration. You can refinance your home with a special FHA loan that is protected by the FHA. This often enables homeowners to save money and allows them to waive the additional mortgage insurance required for a home loan as FHA loans are already insured by the government.
Purchasing your home or paying it off so you own it outright is one of the best ways to provide security for yourself and your family. It is also the best way to ensure that you will have a financial asset that can protect yourself for as long as you own it.
6. Medicare/Health Benefits
Once you turn 65, you are eligible for Medicare and government health benefits. You are able to enroll for Medicare online. You should enroll in Medicare within 6 months of turning 65 to avoid any fees or administrative issues. Medicare comes in two parts; Part A and Part B. Most people don't have to pay for Part A, but most people do pay for Part B. In addition to Part A and B, there is an optional Part D that is available at a low cost that covers most prescriptions. Medicare is much cheaper than comparable private health insurance plans and can save you money throughout your life.
If you anticipate needing additional medical coverage and aren't completely covered by Medicare, there is a great way to receive coverage for these needs. If you are enrolled in Part A and B of Medicare, you can purchase additional Medicare Supplemental Insurance through a private insurance provider. Medicare Supplemental Insurance, also commonly called Medigap, is private insurance that is available to purchase that covers additional medical needs that are not covered by Medicare. There are 10 different Medigap plans available and each one covers different medical issues. Some are more robust than others, and may offer more coverage than you need. Finding the right plan for you is simple; just go online or speak to a licensed provider to find out which plan fits your needs. Do some personal research to make sure that a salesman is not trying to sell you a more expensive package that offers more coverage than you need. Medigap insurance coverage can cover everything ranging from in-house specialized care to outpatient medical care and everything in between.
In addition to Medicare and Medigap insurances, buying life insurance is a great way to make sure that your family and loved ones are taken care of financially should you pass away. As a senior, it will be very difficult and expensive for you to purchase a standard term or whole life insurance policy, and may not be worth the high cost. Because the value is not worth the high cost, it would be prudent for you to look elsewhere for insurance. One popular type of insurance for seniors is burial or funeral insurance. These insurances are the same thing, and provide a way for you to invest just a few dollars each week, and have your funeral expenses and costs covered up to a certain amount. There are policies available in any amount you want, and are extremely affordable. Many plans cost a just a few dollars each month, and provide you with a way to help cover the cost of your funeral. Funerals now can cost over $5,000 total, and are frequently a huge financial burden on families. Purchasing a funeral insurance policy is a good way to save your family money if you are unable to leave them with insurance money.
Medical expenses can be overwhelming. Rest assured that there are ways for you to have the majority, if not all, of your medical expenses covered as a senior.
7. Senior Finance Myths vs. Realities
There are many people in this world who will do anything to make money. This includes taking advantage of others. Often, seniors are the victims of financial scams, fraud, and identity theft. The use of technology is huge in today's world and is often extremely confusing for seniors to understand. The lack of experience is not a bad thing, but it can lead to harmful consequences if used manipulatively. Thieves and scammers know this weakness, and will exploit it to its fullest. Many of the popular scams include credit card offers, free bank checks, award winnings, and so on. In addition, scammers will take advantage of family members and will convince a senior that one of their family members is in trouble and needs money. Requests for money transfers over the phone are completely fraudulent.
In addition to money and financial scams, there are several industries that will try to take advantage of seniors to make extra money.
- Reverse Mortgage Myths. The majority of lenders are honest, hard-working people. As with every industry, however, there are those who will lie and take advantage of others to try to make money. There are many ways that a lender can make money off of a senior; including charging higher interest rates or telling them that their reverse mortgage payments are due when they really are not. Work with many lenders and get information from multiple sources before making a decision. This ensures that you will get the facts from many people and can decide if one person is trying to take advantage of you.
- Umbrella Insurance. Thinking that you are safe from legal woes just because you are a senior is a good way to be caught unaware. Many seniors are still involved in accidents or incidents that end up going to court. Having an umbrella policy can be a good idea, simply because they are so cheap. Many companies offer $1 million in coverage for just a few hundred dollars a year. Just because you are retired doesn't mean that accidents can't happen. It is a good idea to cover yourself so you don't end up losing all of your money and ruining your retirement.
- Medicaid. Contrary to popular belief, you don't have to give up all of your assets in order to go on Medicaid. You can still keep your home, one car, and up to $104,400 in cash assets. If you are applying for Medicaid and don't know if you will qualify, don't get rid of additional money before you know if you are accepted or not. It's better to be rejected than to get rid of your money and learn later that you could have kept more.
If you worry about your finances or feel that you may be a target or victim of financial fraud or a scam, the best thing to do is ask somebody who will know for certain. You can always just stop communication, spending and other financial transactions and go ask for advice. You don't have to give your money to anybody that you don't want to, and sometimes the word "No" is the best thing you can say. If in doubt, always ask.
Being a senior and enjoying retirement, family and friends can be the best part of your life. If you plan ahead and live wisely, you will be able to enjoy the small things that you missed out on during your working years. Take time to make sure your finances are all in line and then go and enjoy life.
This guide was brought to you by MedicareSupplementalInsurance.com.
Sources
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