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15 Financial Tips for Seniors

Senior or not, wealthy or not, we can always use financial input. The FDIC  is a very good resource. This reprint of their article, Financial Tips for Seniors, provides good guidance. So, in Senors About Seniors effort to keep our Seniors informed on matters important to them we’re presenting it here. The 15 tips it contains are excerpted. We’ve added a link at the end of this post to the complete article for your further reading.
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Who is the FDIC?

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The Federal Deposit Insurance Corporation (FDIC) preserves and promotes public confidence in the U.S. financial system by insuring deposits in banks and thrift institutions for at least $250,000; by identifying, monitoring and addressing risks to the deposit insurance funds; and by limiting the effect on the economy and the financial system when a bank or thrift institution fails.

An independent agency of the federal government, the FDIC was created in 1933 in response to the thousands of bank failures that occurred in the 1920s and early 1930s. Since the start of FDIC insurance on January 1, 1934, no depositor has lost a single cent of insured funds as a result of a failure.

The FDIC receives no Congressional appropriations – it is funded by premiums that banks and thrift institutions pay for deposit insurance coverage and from earnings on investments in U.S. Treasury securities. The FDIC insures trillions of dollars of deposits in U.S. banks and thrifts – deposits in virtually every bank and thrift in the country.

For Seniors: 15 Quick Tips for Protecting Your Finances

1. As many consumers get older, they often face issues such as how to maintain their lifestyle and pay for medical expenses on a fixed income for years into the future. Here are banking and other money-management tips for seniors to consider for their retirement years. Getting Help 1. Decide if you need financial help from an expert, and then choose wisely. A financial advisor could help answer questions such as how quickly to take money from savings and how to invest in your later years…

2. Prepare for the possibility that you may become unable to handle your finances. Consider writing down a list of your financial institutions and account numbers and keeping it in a safe place that would be accessible by your loved ones in an emergency. An attorney can help you decide if you should have a legal document known as a power of attorney (POA), which would allow one or more people you designate to make key decisions with as much or as little of your financial or personal life as you choose…

3. Develop a spending plan for your retirement. Having a plan for your money and limiting expenses in retirement is important. Consider new ways to cut costs, such as by letting your auto insurer know you no longer drive your car to work. “Consider continuing to put some of your income into savings, especially for short-term goals such as holiday gifts, because that can help you avoid a large, sudden withdrawal from your retirement investments,” added Luke W. Reynolds, Chief of the FDIC’s Outreach and Program Development Section…

4. Consider limiting the mail and phone calls you receive from marketers. Unsolicited offers from unfamiliar companies can result in you overspending your budget or paying for shoddy merchandise or service from vendors who don’t stand behind their products. Consider being added to the national Do Not Call Registry (call 1-888-382-1222 or visit www. donotcall.gov). Also review the privacy disclosures that banks and other financial companies you do business with send at least once a year. They explain if and how you can limit…

5. Review your credit reports even if you don’t plan to apply for a new loan. Why? Mistakes or other errors on your credit reports could make it more costly for you to buy insurance or borrow money (for example, if your credit card company raises your interest rate on future purchases because of a problem tied to a credit report). And, monitoring your credit reports is a way to detect identity theft. Order your free credit report at least once every 12 months from each of the three main credit bureaus at www. annualcreditreport.com or by calling 1-877-322-8228…

6. Think twice before accepting an offer to “advance” (lend) you a portion of your future pension, Social Security or other retirement income. These offers are similar to payday loans and they likely involve costly fees and interest. You can also find yourself taking out similar loans in the future — paying additional fees and interest charges — to make up for new cash shortages as you repay the original loan. “If you need to borrow money fast, check with your bank and other financial institutions, and compare the products they offer based on the Annual Percentage Rate,” advised Reynolds…

7. Use credit cards cautiously. Accumulating debt can be costly, yet many seniors have considerable credit card debt. Before making purchases using your credit card, consider whether you will be able to pay your balance in full when the statement arrives, so you will avoid costly interest charges. Even small purchases can add up to big credit card bills…

8. Remember that a reverse mortgage will eventually have to be paid back — with interest. Reverse mortgages allow homeowners age 62 or older to borrow against the equity in their homes without having to make monthly payments as long as they meet the terms of their loan agreement, such as staying current on property taxes. However, the money borrowed plus interest must eventually be repaid, usually when you or your heirs sell the house…

9. Think about ways to turn a hobby or another interest into a part-time job. Other possibilities for supplementing your income in retirement include a seasonal job or freelance consulting. But consider if this extra money could affect other aspects of your finances tied to your income, such as a potential increase in your Medicare costs or a possible temporary reduction in your Social Security benefits. Also consider any income tax implications…

10. If you’re considering an annuity, understand the potential pros, cons and costs. You’ve probably seen or heard promotions for annuities, which are financial products tied to a contract between a consumer and an insurance company. Insurers sell annuities but so do other financial institutions, including banks. You buy an annuity by making either a single payment or a series of payments to the insurance company. In return, the company promises to make payments to you, either as one lump-sum payment or a series of payments for a specified time period…

11. Know if you’ve agreed to let your bank cover certain overdrafts. You have a choice whether or not your bank will charge you a fee, perhaps $30 or more, to cover everyday purchases you make with a debit card when you don’t have enough money in your bank account to cover the cost of the purchases. And, you can change your mind on this decision at any time. A recent study by the CFPB found that consumers who have “opted in” (agreed) to be covered by an overdraft program are more likely than consumers who don’t opt in to pay costly fees and face the possibility of having their bank account closed…

12. Look into discounts and other deals. “For consumers over a certain age, some financial institutions may offer breaks on the cost of bank products and services,” said Mary Bass, a Senior Community Affairs Specialist with the FDIC…

13. Make it easier to manage your money and pay the bills. If you’ve accumulated multiple bank and investment accounts and credit cards over the years, consider whether you can close some you no longer use or need. This can reduce the number of accounts you have to manage…

14. Consider additional ways to save time and money. Your bank and the companies you do business with also will likely provide alternatives for you to pay your bills electronically. These options can include online bill paying or having payments automatically transferred from your account. These can save you time and money by avoiding unnecessary trips to pay bills. And, making scheduled payments automatically can help avoid late charges or service interruptions…

15. Organize and protect your important documents. Items to keep at home, in a secure place that’s easy for you to get to, may include your bank and brokerage statements, insurance policies, Social Security and company pension records, and other personal and financial papers you or your family might need on short notice. If caregivers or others regularly visit you, make sure that your checkbooks, credit cards and other financial records are protected…

Senors About Seniors hopes this article was helpful to you!

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