How to protect your family members — or yourself — from elder abuse. A trusting nature can get older people in a lot of trouble when it comes to finances. Here are ways to protect against financial elder abuse: Go beyond reviewing bank and investment accounts The elderly, their loved ones and financial advisers can skim bank and investment accounts or credit card statements to see if something is wrong, or missing entirely, but they should also question certain transactions. “Once you get on one list, you have other telemarketers sending you emails to try and get on other subscriptions,” he said. When credit card or bank statements aren’t easily available, a quick check around the house could do the trick: If someone is being taken care of by a relative or aide, is there enough food in the fridge? Also, look to see bills are being paid and the mail isn’t piling up, said Adam Schoenfarber, a social worker at hospice provider MJHS. A loved one isn’t hurt, and not falling for ‘the best deal’ Scammers are crafty, and the elderly are trusting and open to talking on the phone and entertaining offers, Minear said. Scams can be as simple as deceiving older people, or they can be exaggerated claims that a loved one is hurt and needs money sent to them immediately, according to the National committee for the Prevention of Elder Abuse. As an adviser, it helps her establish a relationship with the client and the loved one, which can help thwart potential financial losses in the future — for example, one time a client of hers said she was missing $10,000 within 72 hours that it disappeared. Cheng along with her client and client’s son were able to contact the bank and get everything sorted out quickly — something Cheng said she may not have been able to do had they not already established that relationship.
Whether retirement is right around the corner or several decades away, it’s never too early to begin planning for the future. Here are 10 game-changing moves it pays to make right away.
1. Get used to budgeting
Sticking to a budget is critical once you begin living off a fixed income in retirement, so the sooner you start, the better trained you’ll be. But more so than that, following a budget can open the door to savings during your working years by showing you not only where your money goes, but where there might be room to cut costs.
2. Get rid of costly credit card debt
There’s a reason credit card debt has a tendency to spiral. For every single day you carry an outstanding balance, you’ll accrue interest charges that quickly add up in a relatively short period of time. If you’re walking around in debt, now’s the time to work on paying it off — before it wreaks havoc on your retirement budget.
If you’re years away from retirement, the money you save on interest charges can go a long way toward building a nest egg instead. Imagine you’re currently paying $400 a year in credit card interest. If you were to knock out your balance and put that cash into a retirement account instead, you’d have an extra $18,000 after 20 years, assuming an average annual 8% return on investment. Now that’s a far better use for your money.
3. Work on paying off your mortgage
Housing is a major expense for seniors, and entering retirement mortgage-free can ease the burden tremendously. Unfortunately, it’s becoming harder and harder for older Americans to shake their housing debt. According to the Consumer Financial Protection Bureau, 30% of homeowners age 65 and over continue to owe money on their mortgages. If you eliminate that home loan by the time you retire, you’ll have far more financial flexibility later in life.
4. Ramp up your retirement savings
The average IRA balance in the U.S. is $94,100, and the average 401(k) balance is $92,500. But while those might seem like impressive figures, given that Americans are living longer these days, saving either amount will probably leave you cash-strapped in retirement. In fact, even if you were to save as much as the average American in both types of account simultaneously, for a total of $186,600, you’d still have a hard time making ends meet as a senior. That’s because over a 25-year retirement, $186,600 leaves you with just $622 per month in spending money. Throw in Social Security, which for the average recipient today equals $1,360 a month, and you’re still looking at less than $2,000 to cover all of your monthly bills.
That’s why it’s so important to save as much as you can during your working years. If you’re under 50, you can put up to $5,500 a year into an IRA and $18,000 a year into a 401(k). If you’re 50 or older, you can make catch-up contributions that raise these annual totals to $6,500 and $24,000, respectively.
Even if you can’t max out these limits, increasing your contributions can make a big difference in the long run. In fact, if you were to put just $100 more per month into either type of account for the next 10 years, you’d have an extra $17,400 for retirement, assuming an average annual 8% return on your money.
5. Take advantage of your company’s 401(k) match
Though not all companies offer a 401(k), 92% of those who do provide one also match employee contributions to a certain degree. Yet an estimated 25% of workers whose companies offer this…