Getting older often means enjoying financial freedom and retirement with your spouse, but that’s not always the reality for some seniors. According to Forbes, seniors who still have debt during retirement face more stress and have a lower quality of life than those who are debt-free.
Make sure you and your partner set yourselves up to achieve financial wellness and security as you grow older and head into retirement. Use these tips to help relieve stress and create a strong financial future.
Pay Off Your Debt
Having debt later in life can be a huge cause of stress for older couples. Not to mention, it can also prevent you from being able to retire in the first place.
At this stage in life, it is essential that you and your partner discuss any outstanding debt you have such as a car loan, mortgage, or credit card debt. Once you’ve determined what you need to pay off, create an organized budget and plan to settle your debt so it doesn’t fall on your spouse or other relatives if anything happens to you.
If you and your spouse are already retired, review your monthly budget to see if there are expenses you can cut back on, or consider picking up a part-time job for extra income. For some seniors, retirement can feel boring compared to their normal, working lives, so getting an enjoyable part-time job is the perfect opportunity to socialize with others and create consistency while earning extra money to pay off debt.
If neither of these options are doable, you and your partner may also look into a home equity loan to help tackle high-interest debt. This loan will usually give you a lower interest rate than a personal loan, and you will receive the payment in one lump sum, meaning you can immediately start paying off your debt.
Assess Your Financial Goals
As you get older, it can be tempting to make extravagant purchases you missed out on when you were younger, but don’t blow all of your money on one spending spree. Even though you might not be in your 20s anymore, there are still financial goals you can work towards. Do you want to retire in another state? Renovate your kitchen? Buy a second home?
Deciding exactly what you and your spouse want can help keep your spending in check and relieve financial anxiety you might have about the future. For instance, if you’re still employed, you and your partner should focus on retirement so you can relax later in life.
Once you’ve set your financial goals, create an organized plan to achieve them and determine a budget you’re comfortable with. As long as you talk regularly about your finances and track your progress towards your goals, you should have nothing to worry about.
Stop Funding Adult Children
If you and your spouse have children, you know how tough it is to see them grow up. You probably helped buy their first car, pay for college, and fund other sentimental life moments. However, once your children become functioning adults with full-time jobs, it’s time to stop funding their finances, or at least start cutting back.
This doesn’t mean you need to stop spending any money on your children, but if you realize you’re still giving them an allowance, paying for their car insurance, or cell phone bills, it is more than reasonable to stop paying. If your children are struggling financially, that is a different story, but if they are doing well, don’t feel guilty. Especially if funding your children is causing you and your partner financial stress or debt, you need to put yourselves first for once.
Sit down and discuss your financial situation with your kids to make sure they understand that you will not be paying their bills moving forward, and that you are not doing this out of malice. Explain that you can still treat them to dinner or buy them gifts for their birthdays, but it’s time for them to be responsible for their own finances.
Prepare Your Will
A harsh reality of getting older is planning for a future where you’re not around anymore. Make sure you and your partner plan ahead and create a will to help your loved ones later on.
You both will need to divide your assets and also check and update your beneficiaries. You most likely listed a beneficiary on your retirement plan, life insurance plan, or other important accounts, so it’s crucial that you ensure these are accurate, especially if you’ve gone through a divorce or had relatives pass away.
This process might be stressful in the moment, especially if you have a larger family, but once you have this done, you’ll feel relieved. Creating a will and getting your financial accounts in order will help make the transition easier for your family and relieve any anxiety you might have about your relatives after you’re not around.