Being Proactive About Your Money: Financial Literacy for Older Adults

Being Proactive About Your Money: Financial Literacy for Older Adults


According to research, about a third of all seniors have trouble grasping basic finances and budgeting. There’s no question this can lead to issues down the road for those on a fixed income. That’s why it’s so important to address your financial situation and make long-range plans as soon as possible. The key is to have a sound and thoroughly reviewed financial plan in place to avoid any confusion. But in order to achieve that, older adults need to have some basic financial literacy in order to make sound decisions for their future.



You can’t know what to do with your money if you don’t know where it’s going. That’s why it’s so important to have a budget, considered by many to be the first step in establishing financial literacy. If you lack a budget, sit down — with a family member if necessary — and get a handle on where your money is going, otherwise, you’ll be in the unfortunate position of guessing about how to make effective use of your available assets.


The right coverage

Medicare is a vital resource for most older Americans. Having a basic understanding of the Medicare system is the first step in ensuring you have the coverage you need. It’s also important to know where the gaps are in Original Medicare, how they may affect your situation, and how to acquire alternative coverage, such as a Medicare Advantage Plan by Humana, which not only provides Parts A and B from Original Medicare, but also coverage for vision, prescriptions, and dental care, services that are not covered under Original Medicare. This is a really critical step in managing your finances, because you could be left owing a considerable sum of money out-of- pocket if you don’t have the right kind of coverage for your specific needs.


Involve a financial planner

The first thing to understand about a financial planner is that they aren’t there to take control and make decisions for you, but to lend their expertise and experience in guiding you toward well-considered and informed financial decisions. It’s important to connect with someone you’re comfortable with; someone who has experience working with families and with the ability to serve as advisor, advocate and facilitator within a family setting, because the decisions you make will affect your offspring and other family members.


Gather your records

Collect all financial paperwork, records and financial data and keep them safely stored where only trusted family members or friends have access in the event of an emergency (compile all passwords together for the same reason). Key records include Social Security and Medicare/Medicaid information; insurance information; banks and bank account numbers; investment income; copies of most recent income tax returns; an up-to-date will (if one exists): mortgage and debt information; and the deed on your home.


Simplify through consolidation

If you have retirement plans that are spread out among different financial institutions, consolidate them so you have a better understanding of your investments, which will make it easier to plan. Do likewise if you have multiple bank accounts.


Discuss estate planning with family

At some point, a member of the family may need to assume management of your finances, tax returns, debt, investments, and make medical decisions for you. One of the worst things you can do is nothing. Failing to identify who will act on your behalf will only leave the door open for dissent, argument and hard feelings among family after you’re gone. Assign power of attorney and healthcare power of attorney, and identify who will make beneficiary designations and execute your will as soon as possible. 

The sooner you approach financial and estate planning using good principles of financial literacy, the easier the process will be. Doing so sets the stage for a more comfortable time in retirement.

Leave a comment