The oldest baby boomers are reaching a significant milestone this year, turning 80. It's a time to reflect and make some crucial financial moves. Aging gracefully requires more than just good health; it's about financial wisdom too.
As you age, your financial goals shift. It's no longer about accumulating wealth but preserving it for yourself and future generations. "It's about clarity, not cutting back," says Jonathan Connolly, President of Wealth Advisors Trust Company. He emphasizes how understanding your spending patterns in relation to long-term projections empowers retirees to make confident choices about their lifestyle.
So, what are the key financial steps for an 80-year-old?
Revisit Your Estate Plan
At 80, it's time to update your legal and estate documents, such as wills and trusts. If you haven't already, services like LegalZoom or Quicken WillMaker & Trust can help you create these essential documents. While planning your estate, also confirm the beneficiaries on your retirement accounts and insurance policies.
Protect Yourself from Scammers
Elder fraud is a serious issue, costing seniors over $3 billion annually, according to the FBI. To safeguard your finances, set up transaction alerts on your bank and credit accounts. If you're not planning to take out loans soon, consider freezing your credit through the credit bureaus. Additionally, identity theft protection services can offer further security by freezing and unfrozen your credit and notifying you if your personal information appears on the dark web.
Keep Your Cash Accessible
As you age, simplicity is key. Keep your cash in safe, liquid accounts like high-yield savings or money market accounts. This ensures easy access to your funds and peace of mind. Share the details of these accounts with your family too.
Feel Confident About Spending
Turning 80 should be a time to enjoy life and spend on experiences that bring joy. This aligns with the "Spending the Kids' Inheritance" (SKI) trend, where boomers focus on indulging themselves rather than leaving everything to their heirs. With rising costs and life expectancy, boomers see this as a reward for their financial discipline over the years.
Connolly suggests that this approach might be more strategic than indulgent. A "strategic spend-down" can improve your quality of life, reduce future tax burdens, and prevent income from pushing into higher tax brackets. For some, the high cost of retirement may deplete the inheritance they hoped to leave.
If you're unsure about your spending, consult a financial professional for personalized advice.
Remember, financial planning is an ongoing process, and it's never too late to make wise decisions. Stay informed, and don't hesitate to seek expert guidance.
