5 Financial Planning Tips for Seniors

Now that you’ve reached your golden years, new financial considerations can arise. Entering retirement can mean living on the assets you’ve built up, potentially changing your lifestyle, and reviewing your legacy planning. This article will explore five financial planning tips for seniors to stay on track and get ahead in their finances.

1. Make sure your estate plan is up to date

Your estate plan dictates how your assets are distributed when you pass away. Over time, changes in your circumstances, as well as tax and regulatory changes, may alter your wishes. Therefore, it is important to review your estate plan and work with an estate planning attorney and adjust it as needed. For example, if your adult children have started a family, you may consider adjusting your estate to help ensure your new grandchildren receive some of your wealth.

Senior life insurance can be a good tool for this process. Structuring it correctly can help allow your heirs to receive it free of income and estate taxes, leaving them with more wealth. Consider guaranteed issue life insurance if you want a quick application process and guaranteed approval.

2. Reassess your investment strategy

Many people shift their investment strategy to a more conservative portfolio as they approach retirement. This can help them reduce risk as they get closer to when they need their assets and lock in potential gains they earned.

This often involves shifting your focus from growth to preserving capital and generating income. So, you may choose to shift away from growth-focused stocks to more stable stocks and even bonds. That said, review your portfolio regularly and work with a professional to ensure your allocation matches your needs and goals.

3. Plan for taxes and retirement withdrawals

Retirees often have several different retirement accounts, each offering different tax consequences. So, a withdrawal strategy can significantly impact taxes. For example, Roth IRAs provide tax-free qualifying withdrawals in retirement. If you plan on having a higher retirement income than now, you may save more in a Roth IRA to enjoy larger tax-free retirement withdrawals.

Another example is taxable accounts. If you plan on retiring before you can withdraw from retirement accounts, you might invest in a taxable account. You can sell investments and withdraw before retirement age, giving you an additional source of income before you officially retire.

4. Maximize your Social Security benefits

You can qualify for Social Security benefits at age 62. However, delaying taking your benefits each year up to age 70 increases the monthly benefit you are eligible for. Therefore, delaying your Social Security benefits may make sense if you can afford to do so. This may involve working longer or continuing to work part-time in retirement. It could also mean saving extra for retirement so you can delay Social Security longer without failing to cover your retirement living expenses.

5. Review your lifestyle needs

Retirement can bring significant lifestyle changes, and some can allow you to save money. For instance, if you no longer need to commute to work, consider selling your vehicle or one of them if you and your spouse both own cars. This can help you pay off any remaining debt from an auto loan and save on gas and maintenance.

Another example is your home, since seniors may tend to have significant home equity or own their homes outright while not having kids in the house. So, you could consider selling your home and buying a smaller, less valuable house to save money. Furthermore, you may relocate to an area with lower living costs and income taxes. This can stretch your savings even further.

The bottom line

A few strategic actions can set you up for a successful financial future as you enter retirement. Start by re-evaluating your estate plan to make sure it matches your wishes. Assess and adjust your investment allocation to be more conservative and create a tax-friendly withdrawal plan. Consider postponing Social Security as long as possible to maximize your benefit. Meanwhile, review your lifestyle needs and consider downsizing if feasible to reduce debt, lower your taxes, and save money. Following these steps can help you strengthen your financial position so you can enjoy your golden years with financial stability.

Content within this article is provided for general informational purposes and is not provided as tax, legal, health, or financial advice for any person or for any specific situation. Employers, employees, and other individuals should contact their own advisers about their situations. For complete details, including availability and costs of Aflac insurance, please contact your local Aflac agent.

Aflac coverage is underwritten by American Family Life Assurance Company of Columbus. In New York, Aflac coverage is underwritten by American Family Life Assurance Company of New York. 68000 series: In Arkansas, Idaho, Oklahoma & Virginia, Policies: ICC1368100, ICC1368200, ICC1368300, ICC1368400. In Delaware, Policies A68100-A68400. 65000 series: In Virginia, Policies ICC0965JTO & ICC0965JWO. B61000 series: In Arkansas, Idaho, Oklahoma & Virginia, Policies: ICC18B61JWO & ICC18B61JTO. In Delaware, Policies B61JWO, B61JTO. B60000 series: In Arkansas, Idaho, Oklahoma & Virginia, Policies: ICC18B60C10, ICC18B60100, ICC18B60200, ICC18B60300, & ICC18B60400. Q60000 series/Whole: In Arkansas & Delaware, Policy Q60100M. In Idaho, Policy Q60100MID. In Oklahoma, Policy Q60100MOK. Not available in Virginia. Q60000 series/Term: In Delaware, Policies Q60200CM. In Arkansas, Idaho, Oklahoma, Policies ICC18Q60200C, ICC18Q60300C, ICC18Q60400C. Not available in Virginia.

Coverage may not be available in all states, including but not limited to DE, ID, NJ, NM, NY or VA. Benefits/premium rates may vary based on state and plan levels. Optional riders may be available at an additional cost. Policies and riders may also contain a waiting period. Refer to the exact policy and rider forms for benefit details, definitions, limitations, and exclusions.

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