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Putting Together a Financial Plan
Financial and Legal Worries of Assisted Living Residents

Creating a Financial Plan
Creating a Financial Plan

If you or your loved ones have put off the tough talks about the power of attorney, financial matters and all the other conversations that can seem difficult, it might lead to problems in the future.

Not to worry, as many of the steps listed here discuss relatively painless solutions. After all, taking care of money now leaves less room for future problems.

Steps to Making a Financial Plan

1) What are you going to do with your money?

Make a Will. It is easy to do if organized and have the financial paperwork handy. An estates attorney handles the fine print. First, make a list of your most valuable assets, as well as ones with sentimental value. Divide them up and assign to the people or organizations you want to inherit them. Remember, you can always go back and change it. Now. assign an executor.

2) If the worst happens, who's in charge?

Designating the executor comes first, but you also need to assign someone who has the power of attorney to make medical choices and financial decisions for you. They are two different people and it's vitally important to make sure that someone has these powers is someone you trust, if the worst case scenario occurs. Example: You've lost the ability to make a choice or express it.

3) Include all who need to know.

Let family closest to the person understand the financial and legal decisions. A family meeting is the best place to announce who handles the end-of-life decisions.

4) When change occurs, what to do.

If assets change the value, it changes the will and the amounts each recipient receives. Make sure you update the documents, at least once yearly, to avoid guessing your thoughts.

Avoid Financial Pitfalls

Credit Card Debt and Seniors

Senior citizens are not immune to credit card debt. There are many seniors who flounder in the deep end of debt. Lowered income and misunderstanding the terms of credit card(s) contribute to increased debt.

No Paycheck

Older Americans no longer receive a steady paycheck when they retire. Social security payments and retirement payments are not enough to pay off monthly credit card debt. Often, dementia is a factor in missed payments or forgetting to pay the bill.

Vulnerable to Scams

A disturbing way that the elderly find themselves in debt is through scams. Identity theft is a result of a scammer using a senior's credit card information to go on shopping sprees or to take cash advances.

Take precautionary steps to avoid scams. Speak with a credit counselor. Some states offer programs for senior citizens for debt counseling, and many are available through local senior centers.

Seek Help

Talk to a trusted friend or a close family member. There's no shame admitting to having debt. The next step is destroying the cards. Then, begin to make payments on the largest credit account first and work your way through until all get paid in full. Close once they are current.

Create a budget of your expenses. List food, utilities and other essentials. Then, apply what's left to pay off accounts. Most companies will try to get customers to stay by offering lower rates, higher credit limits, and rewards. Avoid these temptations.

Be Wary of Easy Solutions

Beware of commercial credit card debt 'solutions'. Some companies could leave you with an empty bank account and no debt solution. Free consultation services are available through state-run facilities and senior centers, and your church. Other community programs are available if you qualify for certain income guidelines.

Diversify Your Funds

Even when the economy's depressed, investing is profitable when prudently planned and followed. Placing money in stocks and bonds can help secure your future. Consumers find it difficult to keep up with the high costs of long-term care, so have additional income. It makes a big difference between living comfortably in a retirement community or living in an undesirable place.

Savvy investors think far ahead and follow their investments closely. If you are unsure about investing on your own, consult a trustworthy stock broker or ask friends for a referral.

Other ideas for income producing revenue:

Real Estate

A wise saying among real estate investors is "They're not making more land." Perhaps some countries are building islands, but valuable property in the USA will always be in demand. The most profitable real estate is commercial - sell the land to a company that wishes to build a commercial building.

New Technology

Software apps quickly gain momentum and solve consumer issues. Low-cost hardware, software, and Internet access have made owning a computer easier for everyone. Buying stock in a well-established computer or software technology company offers profit.

Green Movement

Green or renewable technology is very accessible. More companies realize the consumers want environmentally safe products. Sustainable practices and products are very desirable, and consumers pay a higher price for them. Organic items and the companies making or growing them are worth investing.

Buy Low, Sell High

The USA sees periods of economic growth and downturns. Buying stock low during a downturn, then selling high when the market begins to grow is a common practice. Buy stock into a well-established company that thrives beyond the downturns, is your best bet. A depressed market may last for several years, but eventually companies begin to see profits again. Seek businesses that provide essential products.

Investment Options Still Available Even For Retired Seniors

Start early at investing. Foresight, even a few years before one needs to move into assisted living, takes careful planning and follow through.

It starts with a budget. It helps to understand the probabilities of needing the extensive care. Talking with one's doctor or family provides the kind of information that's helpful for early senior care planning.

It's never too late, or early, to evaluate an investment strategy

As your career winds down, the monthly budget targets safer investments like fixed income either though interest or dividends is lower. There's always a fine line between investing in stocks that provide a healthy return but isn't too risky either. It's best to talk it over with a qualified financial professional, one who knows when to transition into safer assets is key to beginning the process.

If you're still five or 10 years away from retirement and have created enough of a retirement nest egg to feel comfortable, consider using some of your cushion towards short-term investments that can provide a higher reward at the expense of a possible loss.

The best bet may actually be to begin discussing financial solvency among the family members.

Do research on investment strategies for seniors. You can enlist the aid of advisers like George Wells III, a Detroit-area financier who targets senior populations and helps them find money that they might not have had anyway.

For example, he told the Free Press that many seniors who fought for their country and received an honorable discharge are eligible for a government pension program. It's worth $2,000 per month in some cases, or enough to offset most of the costs of an assisted living facility or even in-home nursing care.

Wells also likes "stretch" IRAs, which are similar to other retirement savings accounts in that they provide tax breaks to seniors who have been saving their money. However, the holder of the IRA can name a spouse as a beneficiary, meaning that unlike the conventional individual retirement accounts, the tax breaks continue into one's twilight years.

What you choose to do about your finances requires defining a large number of variables that you may or may not have any control over. But you can get started with ideas like these and envision a brighter, less fiscally strained future if you take an hour a week or so to get your money in order.

Carol Marak
Carol Marak

After seven years of helping her aging parents, Carol Marak has become a dedicated senior care writer. Since 2007, she has been doing the research to find answers to common concerns: housing, aging and health, staying safe and independent, and planning long-term.