Retirement Planning: 7 Tips for Aging in Place on a Budget

retirement planning
Live Out Your Golden Years According to Your Wishes

Aging in place is a retirement planning goal for many seniors. In order to maintain the financial security you’ll need to remain in your home and live independently as long as you’re able, it will be important to plan ahead with smart financial habits. The seven tips below can help you examine important financial considerations and build a strategy for aging in place.

Tip #1: Always Live by a Budget

Aging in place will require you to be budget conscious – and not just once you retire. If you want to build your financial security, budgeting should be a long-term aspect of your retirement planning strategy. It’s critical to know where your money is going each month and to avoid overspending on things you don’t truly need. All the money you save by spending more carefully can be funneled into retirement accounts or a savings account for home improvements that could make aging in place more feasible in the future.

Tip #2: Have Power of Attorney Documents in Place

This is an important step for adults of any age because none of us knows what the future holds. However, it’s particularly important for retirees to complete a durable financial power of attorney. It’s a legal document that will be used if you are no longer able to make your own financial decisions, and it allows you to name a trustworthy person to act on your behalf. Oftentimes, it may be a family member who is also your caregiver, as this allows that designated person to make financial transactions on your behalf.

SEE ALSO: Retirement Planning Tips for Any Age

Tip #3: Automate and Streamline Your Bills

Many retirees find it daunting to do all banking and bill-pay transactions online, but this streamlines the process and makes it easier to manage your finances as you age. You can set up direct deposits for Social Security, automate withdrawals from your sources of income, automatically pay bills, and more. This retirement planning step is also ideal for aging in place because you can provide shared access to online accounts with your financial POA. Just ensure you’re taking steps to keep your online information safe.

Tip #4: Protect Yourself from Scams

Senior citizens are a primary target of financial scammers, so it’s imperative that you maintain a close eye on your accounts and report any irregularities to your bank right away. All of your retirement planning efforts can become moot if a bad actor is successful in accessing your hard-earned nest egg. Aging in place requires that you continue to protect your assets, and your financial POA can be a second set of eyes on your accounts to help watch for concerning activity, too.

Tip #5: Balance Out Utility Costs Throughout the Year

It can be difficult to budget when monthly expenses change. This is common with utilities like water, electricity, and gas. However, most utility companies allow you to utilize a payment plan which charges you the same, predetermined amount each month. This helps you avoid price spikes during certain times of year – meaning it will be easier to stay on budget and maintain your financial security as you’re aging in place.

SEE ALSO: Do You Have Clarity on Your Desired Retirement Lifestyle?

Tip #6: Review Your Insurance Needs

While you’re aging in place, your insurance needs can change. Review your current policies and premiums and make sure they still work for your needs. For instance, you might be paying your insurance premiums quarterly, but switching to a monthly option could make more sense for your budget. You might also find a payment option that offers discounted rates, meaning more of your income can support your retirement planning needs.

Tip #7: Pay Off Your Mortgage

If aging in place is an important aspect of your retirement planning efforts, then it pays – literally – to enter retirement free from mortgage debt. If you’re not currently on track to pay off your home before you retire, evaluate your budget. It’s possible that you can pay more toward it each month by cutting spending elsewhere. When you own your home, you can rest easy knowing it’s yours as you’re aging in place, and it can be a tremendous asset to utilize if you end up needing to adjust your living situation as the years go by.

Do Your Retirement Planning Efforts Consider Tools for Aging in Place?

Retirement goals aren’t just about money – there are important lifestyle considerations, too. If you prefer to remain in your home, then it’s smart to plan ahead for aging in place.

If you’d like to speak with a professional about your overall retirement planning needs, we can help. At Andersen Wealth Management, we help our clients develop a comprehensive strategy that blends financial needs and lifestyle desires. Schedule a discussion with us today to learn more.