Why Senior Citizens Should Consider their Financial Planning Options

Last Updated: March 6, 2017By Tags: ,

By Jess Walter


The idea of retirement often conjures up scenes of golden sunsets spent on a porch in California. The days flow by and there is not a care in the world, apart from ensuring that the cookies come out of the oven on time. This may seem like the ideal scenario, however, there is a slightly darker side to retirement that people are loathe to consider. The inevitability of death always weighs heavily on the minds of those who have reached a mature age, and provision for loved ones needs to be considered.

Seniors and Debt – What You Need to Know

Going into retirement without debt used to be the norm, but with the changes in the economy and the ease of obtaining debt, many seniors now have to face their golden years with debt repayments looming overhead. Although there are age restrictions on many types of debt, retirement often occurs before the age cut-off. Seniors are faced with steep monthly expenditures without the corresponding higher income that they’re used to. Furthermore, mounting costs in terms of healthcare often necessitate incurring further debt.

Property Still Remains a Worthwhile Investment

After the 2008 economic crisis, property markets experienced spates of volatility. Purchasing a home has its advantages and affords the owner more flexibility and security than a rental. With this in mind, it’s important to understand that the obligation of the repayment will still continue in the event of an owner’s death. The debt will form part of the estate, and if the remaining spouse is unable to meet the obligations of the loan, they may lose their home. Furthermore, property happens to be an asset in the estate as well, which provides a legacy for the heirs.

Creating a Legacy

Apart from the inherent risks that debt poses for senior citizens, there is also the desire to leave a legacy for their children. Those who are unable to provide a legacy for their children with their assets have the option to take out certain life insurance policies to cover this wish.

Furthermore, investments and assets often form part of the estate, whereas insurances have the option to pay out to the beneficiary directly. This reduces the liability on the estate, which provides heirs with a tax-free inheritance. That discussion with a financial adviser can be the difference between a healthy or insolvent estate.

Jess Walter  is a freelance writer and mother. She loves the freedom that comes with freelance life and the additional time it means she gets to spend with her family and pets.


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