As April marks Financial Literacy Month, it is an excellent time to start improving your financial literacy. Gaining financial savvy can help you handle the challenges and complexities of aging.
Although sometimes overlooked, financial literacy is a critical component of aging well. It promotes economic freedom, helping you afford care and housing as you grow older. Understanding money matters also protects against fraud and financial exploitation. Resources such as websites, online tools, and apps are available to help you improve your financial skills.
Financial Health Literacy in Older Adults
Successful aging includes managing income and expenses, medical bills, and insurance, choosing appropriate health services, and planning for long-term care needs. These are all components of financial health literacy, which focuses on health care decisions, financial management, and planning. Research published in the National Library of Medicine has identified a connection between healthy aging and financial health literacy.
Raising awareness about financial education is important for every generation, even older adults. Seniors who understand the financial aspects of their care, they have greater autonomy, make more informed
decisions about health care, and enjoy improved physical and mental health. For instance, choosing an optimal long-term care insurance plan requires understanding care costs, comparing available plans, and identifying suitable options. Personal financial literacy supports these tasks.
Developing financial skills can promote self-advocacy in aging. It can help older adults access services and resources and plan for the future. Individuals who are of advanced age and have cognitive impairments, less education, and low income may face increased barriers to good care. Having a financial plan in place for them is especially beneficial.
Protect Yourself Against Financial Abuse
Beyond financial health literacy, another important component of older adults being financially literate involves identifying and preventing financial abuse and fraud.
According to AARP, adults 60 and older lose $28.3 billion each year to financial abuse and exploitation. Victims forfeit significant portions of their retirement savings. They also suffer declines in mental health.
In many cases, the abuser is someone the elder trusts, such as their adult child. Per the National Council on Aging (NCOA), family members make up 60 percent of perpetrators of elder financial abuse.
To safeguard yourself, consider making someone you trust your financial power of attorney while staying in touch with multiple loved ones. Keeping more people involved allows them to flag suspect behavior. You can also sign up for services that track your bank accounts, investments, and credit cards, allowing you to spot suspicious activity.
Avoiding Scams
Scams that target older adults seek to take retirement funds. Government impersonators, lottery scammers, and robocalls contact seniors trying to gain personal information, such as bank account and Social Security numbers. Other scams claim there is a tech support issue or pretend to be a grandchild.
To avoid being scammed, pause and verify details before giving out information or clicking on links in your inbox. For instance, if someone calls you claiming to be your grandchild, hang up and reach out to your grandchild to make sure they contacted you.
Since scams rely on fear and urgency, take your time before acting. Don’t share personal information over the phone or online and consult with a trusted person when you receive a suspicious call or message.
If you have social media accounts, ensure that you have strong passwords in place and set up your privacy controls.
Personal Finance Resources for Older Adults
Financial literacy in older adulthood is essential for navigating the care system and avoiding fraud. Today, resources, including apps for mobile devices, tools, and websites, seek to help older adults build financial literacy. This technology could help you hone your financial knowledge and skills.
Improving financial literacy begins with examining your current financial well-being. Financial well-being encompasses financial freedom and security. It allows you to enjoy autonomy over your housing, care, and money in your later years.
The Consumer Financial Protection Bureau’s (CFPB) offers a short online questionnaire. Ten questions assess your attitudes about money, current financial situation, and ability to handle future expenses. The quiz does not ask for any personal financial information. After submitting the survey responses, the tool delivers a financial well-being score.
The CFPB also has guides for planning for later-life financial security, reverse mortgages, and debt.
The NCOA provides online articles for older adults to learn more about money management. Topics include affording food, qualifying for benefits programs, and understanding a home equity line of credit.
Providing more comprehensive assistance with budgeting, retirement planning, and financial decision-making is AARP’s Money Map. This free tool seeks to help seniors take control of their finances. Money Map includes budgeting tools, retirement planning calculators, investment advice, and education materials.
Apps for Financial Literacy
In addition to online resources, apps can help you learn financial skills and manage your money.
- Budgeting apps, such as You Need a Budget, Every Dollar, and Good Budget, track spending and teach budgeting techniques.
- Some apps, such as World of Money, teach financial literacy. The Motley Fool ranked World of Money as the best financial literacy app.
Consult a Professional
In addition to using resources to learn more about your finances, the assistance of a professional can be invaluable.
Certified Financial Planners (CFPs) work with clients to help them achieve their financial goals, such as retirement and affording long-term care. Meanwhile, chartered retirement planning counselors (CRPCs) are financial advisors who are experts in retirement planning. Consider working with a CRPC for retirement-specific advice. Keep in mind that some of these experts will celebrate Financial Literacy Month by offering free webinars and workshops.
Your elder law attorney can also provide support with increasing your financial know-how as you age. With their guidance, you can create an estate plan, apply for public assistance, and plan affordable long-term care.
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