Financial planning is essential for all ages and stages of life, but it is especially important for seniors. Living on a fixed income can be daunting, but there are many ways to ensure that your money is secure and that you have enough to cover your expenses. Certificates of Deposit (CDs) are one of the safest investment options for seniors, as they guarantee a fixed return on a fixed amount of money saved for a fixed amount of time. Retirees may rely on their own savings for a portion of their retirement income, such as traditional and Roth IRAs, 401(k)s, 403(b)s, SIMPLE IRAs, and taxable investment accounts.
Other sources of income may include collectibles, antiques, and property. Many seniors sell their primary residence and reduce its size, investing part of the profits in additional income. It is important to have cash available for unexpected expenses such as a new car, home repairs, vacations, or medical care. Money market accounts, certificates of deposit, and Treasury bills are all safe places to store cash for short-term needs.
These secure investments provide a small return in the form of interest and return of principal. Sufficient income this year may not be enough to cover expenses 10, 20 or more years in the future. Therefore, it is important to plan ahead and make sure that your money is invested in safe and secure investments that will provide you with the income you need in the future.