14 Tips From Financial Sages That Seniors Need To Know (Part 2)

14 Tips from Financial Sages

Last week, we posted seven financial tips from our financial sages. We’re back this week with Part 2 of that post. Read below for seven more awesome pieces of advice from the experts:

8. Understand Your Limits

“Please don’t let your adult children take advantage of your generous nature. Retirees can be on a tight budget and helping their kids buy a car, buy a house, pay for grad school, pay for grandkids’ braces, etc., can really derail their plans.

Understand your limits for gifts and stick to them. Otherwise you may be giving them the gift of moving in to their homes when you can no longer afford your own.”

Kristi Sullivan - Sullivan Financial Planning

Kristi Sullivan, CFP®

Sullivan Financial Planning


9. Evaluate Your Cash Flow

“The most important financial issue that senior citizens should focus on for 2016 when evaluating their financial plans is cash flow. There is no inflation adjustment on Social Security benefits for 2016, however, 3 out of 10 Medicare recipients will see increases in their premiums.

In order to maintain the same level of cash flow some retirees will need to re-evaluate their budget and make a plan for retirement account distributions. Depending on their tax situation in 2015 and 2016, taking some or all of their increased distribution by the end of this year, may help reduce their overall tax liability.”

Erik Klumpp - Chessie Advisors

Erik Klumpp, CFP®

Chessie Advisors


10. Organize your Documents

“When someone says “Review your financial plan,” most people automatically think about money-related items – spend less, review your investments, etc. But one very important component of a financial plan is estate planning.

If you do have documents in place, they should be reviewed every few years. If you don’t, get some! If you are married, you may think “Well, everything will go to my spouse.” What if something tragic happens to you both? Will your assets be distributed according to your wishes? What about those who are widowed or single? Having documents/instructions in place will help your loved ones during an already difficult time.”

Carol Berger - Berger Wealth Management

Carol Berger, CFP®

Berger Wealth Management


11. Prepare for Rising Healthcare Costs

“Quality of life issues must become more prevalent in planning for seniors and a more fulfilling retirement scenario. Longer life spans will require retirement funds to be stretched over more years.

Health care and all its many components is and will continue to be a substantial cost to participants that must be factored into any retirement scenario. Medicare, particularly Part B costs, Part D (Drugs) and Supplemental policy costs are increasing and can account for a substantial amount of a retiree’s monthly income. Seniors need to consider not only the premium costs but the deductibles and co-pays.”

Peter Creedon - Crystal Brook Advisors

Peter J. Creedon, CFP®, ChFC, CLU, CSA

Crystal Brook Advisors


12. Revisit Your Budget Every Year

“When evaluating 2016 financial plans, it is crucial for senior citizens to anticipate increased spending habits and to create a type of budget considering income in retirement is becoming more and more limited.

In that budget is also important to factor in lifestyle changes (such as sports, hobbies and past times) and to factor in those costs into the budget as well. Keeping budgets simple and monitored regularly will ensure they are effective and not forgotten.”

Michael Khouri - National Financial Advisers

Michael Khouri

National Financial Advisors


13. Tax Efficient Withdrawals

“It’s important senior citizens understand how to withdraw funds from investment accounts in a tax efficient manner. For those with multiple types of accounts (e.g. IRA, Roth IRA, and taxable account), there may be significant tax planning opportunities.

Sometimes it makes sense to distribute funds from an IRA, and pay taxes on the income, even if the funds aren’t needed for current living expenses. Ultimately, each person’s situation is unique so it’s important to look at the tax consequence of all options and pull from the account(s) that will maximize long-term tax efficiency.”

Justin Rush - JGR Financial Solutions

Justin Rush, CFP®

JGR Financial Solutions


14. Beware of Inflation

“The most important financial issue for senior citizens is inflation. Because seniors typically have a fixed amount of money (i.e. their retirement savings) to last them throughout the remainder of their life, if they do not achieve an adequate rate of return on those savings, they can be losing ground every year.

Couple that with the fact that Cost of Living Adjustments (COLA) on Social Security are typically less than the actual inflation rate, each check from the government has less purchasing power than the last. Lastly, Inflation for senior citizens can be higher than the overall rate reported by the government, because healthcare costs – typically a seniors largest expense, increases at such a higher rate (long-term average above 5%) than almost anything else.”

Brent Dickerson - Trinity Wealth Management

Brent Dickerson, CFP®

Trinity Wealth Management




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