As a retiree, it’s important to closely monitor your finances so you will not only be able to manage your living expenses, but also preserve what you have so you can have more to pass on to your family. As we get older we can often fall into some common financial pitfalls that can deplete not only our retirement savings but also our potential estates. Here are three of the most common money mistakes and how to avoid them.
Money Mistake One: Credit Card Balances
Just like everybody else, retirees can fall victim to one of the most easily avoided financial problems: monthly credit card balances. Though keeping a balance on a card with an introductory rate that does not charge interest isn’t so bad, interest rates on balances can be shockingly high. The best way to avoid credit card problems is to simply pay off the monthly credit card bill in total at the end of each billing cycle.
Money Mistake Two: Long-Term Care Insurance
You don’t think twice about having car insurance or home insurance to guard against fire, but how many people fail to get adequate long-term care insurance? The probability that you will need long-term care of some type is about 1 in 2, while the chances your home will be damaged in a fire is 1 in 1200. However, people who do not have a lot of assets may not benefit as much from long-term care insurance, so you should talk to your financial advisor for a detailed analysis of your needs.
Money Mistakes 3: Scams
While we’ve blogged about financial scams before, it’s important to reiterate that falling victim to identity theft or fraudulent investment advice can be incredibly damaging. Never rush into an investment and never give out personal information to someone whom you don’t know or who has called you out of the blue.