Top 3 financial challenges facing seniors

Retirement should be a time of comfort and relaxation — and maybe one or two tropical vacations. But many retiring seniors find themselves in a place of fiscal hardship, either due to poor financial planning or rising federal costs, that cause unwanted stress and difficulties.

“Millions of Americans retire every year without first seeking financial advice and support, leaving them victim to struggle and hardship they may have otherwise avoided. There are many steps seniors can take to set them up for success in retirement and beyond, and it starts with first understanding their unique situation.”

-Clay E Hartman | Partner | Senior Wealth Advisor | Frontier Wealth Management

Across the nation, seniors face many major financial challenges as they head into retirement. Clay Hartman, Partner and Senior Wealth Advisor at Frontier Wealth Management, breaks down the three most common financial challenges that seniors may face and gives helpful, simple advice for how to solve them.

Problem: Debt on a fixed income

Seniors today have more debt than those from previous generations. In 2015, homeowners aged 60+ were three times more likely to have mortgages than those 35 years prior. In addition to mortgage debt, today’s seniors are also more likely to still be paying off student loan debt and have higher amounts of credit card debt.

And because most seniors are on a fixed income (either due to Social Security payouts or set retirement income), attempting to pay off these debts can be stressful, and sometimes virtually impossible.

Solution: Make (and stick) to a budget

It’s important to note that debt in retirement is not necessarily a bad thing — especially if your fixed income is far more than enough to manage your debts. To manage and overcome your debts, create a monthly budget and stick to it as best as you can (you should expect to spend nearly the same in retirement as you do now).

Luckily for seniors, living on a fixed income makes budgeting that much easier.  If you have never made a budget before, here’s a general equation:

Total monthly income — Total monthly expenses (debt, entertainment, groceries, health care, etc.) = Monthly budget

If you feel overwhelmed by your finances, you can work with a professional. Financial planners can help you prioritize which debts need paid off first and how you can find savings in order to reach other goals (such as saving for a vacation).

Problem: Scams/identity theft

Older consumers are more likely to be victims of financial exploitation than younger generations. The number of fraudulent companies attempting to target seniors is on the rise, according to the National Adult Protective Services Association.

The most common forms of financial exploitation or scams are:

  • Lottery scams (when someone asks you to transfer funds to collect unclaimed property/prizes
  • Fraud (if someone asks you to invest in their company or if someone claims to be a grandchild, asking for a wire transfer)
  • Contractor scams (when you pay someone to do work on your house, but the work is never completed)
  • Social Security Administration scams (when someone claims to be from the SSA and threatens legal action)


Solution: Stay diligent

As a rule of thumb, do not give out your personal information or provide initial payment before researching a company. Know that many government organizations, such as the Social Security Administration, rarely contacts people with a phone call — and they will never make a threat of legal action.

And if it is someone claiming to be a loved one, attempt to contact your friend or family member on your own before sending money or information.

Problem: Rising health care costs

In general, senior health care is much more expensive than many realize. The common misconception with Medicare is that it covers all the health problems seniors face. Unfortunately that is not the case, and many seniors are left covering the gaps left by traditional Medicare.

In 2013, the average Medicare beneficiary paid $5,503 in out-of-pocket costs, or 41 percent of their Social Security income. If a couple lives to be 85, that would equate to $220,120 in costs over the next 20 years — assuming they don’t require more costly services, such as moving into a nursing home, which can cost an average of $200 per day ($6,000/month).

Solution: Supplement your Medicare

If you’re worried about funding the additional out-of-pocket costs left from health care, you should consider enrolling in a plan to help cover your gaps. You can choose to get a Medicare Supplement plan, which will work in tandem with your Original Medicare coverage to help pay for things not covered (such as your deductible and skilled nursing care).

How much money a supplement plan can save varies greatly from person to person. Usually, a Medicare Supplement plan saves beneficiaries money if they frequent the doctor/hospital or have pre-existing conditions. Already have a Medigap plan? Our agents find our customers an average of $634 in savings per year when switching plans.  

United Medicare Advisors is more than just Medicare. We are dedicated to helping you find your best outcomes, through health care and beyond.


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