By Mary Jo Terry, Managing Partner at Yrefy
Fears of a recession are rising as the Fed continues to raise interest rates. But while older Americans lived through and experienced The Great Recession, many weren’t retired yet with an even more limited budget and were still in the workforce when the economy crashed. However now, in 2022, as we approach recession territory, older Americans need to be cautious of how their money is spent and find ways to be more frugal with their dollar.
Delay Social Security payments
While it might seem like a great idea to get more cash quickly, delaying receiving these benefits will actually mean the amount increases each month you delay taking them beyond retirement age. This means that when you do begin taking them, you could get a much larger monthly check. If you find yourself to be a chronic spender because of some extra money, this can be especially helpful for you. By not taking the money yet, you can prevent yourself from spending it so that you’ll have it on hand when/if you really do need it.
Adjust your budget
Take a look at your current budget and see if it’s still working for your lifestyle. Even if you made it at the beginning of the year, it likely needs some big adjustments. The price of practically everything has gone up, meaning you’re spending over in some areas where you didn’t even realize it. The current economy is changing quickly, which means a budget redo is necessary. Take an hour to sit down and figure out exactly where your money is going, what you’re saving, and where you can cut costs to save a little extra.
Make more money
If you’re struggling already, an option you might not prefer, but can do, is to make money. There’s a wide variety of work-from-home jobs now that range from needing expertise in technology, to know how to turn on a computer and type. Look into work-from-home jobs, or traditional in-office setting jobs that could work for you. Even if it’s part-time, picking up extra cash can be sure you’re safe. The best way to maintain a good income is to raise it. Fine-tune some of the skills you left behind in the workplace and jump back in.
Check your insurance coverage
One particular example is life insurance. If something were to happen to you, would your loved one(s) be able to cover the costs of any outstanding debts, expenses, etc? How hard would the loss of your income hurt them financially? Although these might be tough questions to think about, they’re necessary. Because of inflation, your life insurance policy likely isn’t enough to help your family get by until things can get figured out. Consider upping your policy and looking into how much your family actually needs to live comfortably during these tough times. This investment could save a lot of trouble in the long run.