Some money mistakes can result in irreversible financial damage to a person. Retired people have no regular income, and they usually depend on pensions to meet their financial needs. If they commit serious money mistakes, it can seriously impact their retired life.
Here are three such serious money mistakes that senior citizens must avoid to protect the quality of their retired life.
At the time of retirement, you may receive a huge corpus as pension income or as the maturity of the investment that you did towards your retirement planning. Such corpus may seem sufficient to meet the expenses during the early years of your retirement, but gradually it may fall short because of inflation.
Inflation will continuously erode the value of your money, and if your corpus is not invested in an asset that can beat inflation in the long term, your corpus may soon fall short of meeting your retirement needs.
Exhausting Retirement Corpus
You should use the retirement corpus to meet your regular needs as well as meet your financial goals in sync with your retirement plans.
However, you should never exhaust the retirement corpus in the mid of your retirement years. Once you have retired, you may find it very difficult to return to an active working life to meet your expenses.
If your retirement corpus is not big, you should try to reduce your expenses. You may use a loan facility, such as reverse mortgage to meet your expenses. You may discuss your financial issues with your children and get their help. Remember, your retirement corpus is not only a means to meet your monthly expenses, but it also helps you in times of financial emergencies. So, don’t end up exhausting your retirement corpus; better find an alternate solution like cutting your expenses, living in a smaller home, making subtle changes in your lifestyle, etc.
Allowing Others Access To Crucial Personal Financial Information
Do you know how important your financial information is? You would have often heard the news about elderly citizens being cheated through spam mails and fraud calls.
Retired people depend entirely on their retirement corpus to meet their expenses and to live the rest of their life.
Allowing access to crucial financial information like online banking details, credit card information, bank OTP, investment details, etc., to an unknown person can put you at risk of fraud.
Senior citizens need to keep their financial information in a secure place and never share the crucial information with anyone other than people whom they know very well and trust.
Some other money mistakes that senior citizens should avoid are not updating their Will from time to time, living in debt, not updating the nominee in various financial assets, not renewing the health policy, not maintaining adequate emergency fund, among others.
Always remember that it is better to avoid financial mistakes rather than finding the solution after committing a mistake, especially if you are a senior citizen. So, beware of mistakes and live a healthy financial life!
The author is an Independent Financial Journalist