Every now and then you will see something in the newspaper or on social media about someone in their 90s graduating from college with a degree that they always wanted, competing in a marathon or recently an 85 year old German gymnast with amazing skills These examples are all very inspiring and remind us that you are as old as you feel. That is certainly true. At the same time however there may be some things that you should be cautious about as you get older.
One of these is taking big risks with your finances. Almost every financial planner will tell you that you take financial risks when you are younger and reduce the risk taking as you get older. If you haven’t planned effectively however you may be tempted to take risks to accumulate the funds that you know that you will need for your retirement. In fact this is why scammers do so well with seniors – The lure of getting a lot of money with a limited investment is too good to pass up. It’s the same with so-called pyramid schemes that promise fantastic returns with unbelievable interest rates. These schemes are almost never legitimate however even if there are some people who have benefitted from them in the early stages.
Rule of thumb – if it seems too good to be true it almost always is. The best bet is to start retirement planning early to avoid having to play catch up. If you haven’t done a good job with the planning and are worried about retirement then visit a financial planner associated with a legitimate financial institution and be guided by their advice. You should also follow the other strategies discussed previously in this blog such as trying to increase earnings or cutting expenses.
Following certain financial dreams may also not be a good idea as you approach or are beyond retirement. My friend’s dad had long had a dream of developing some land that he owned. For various reasons the dream kept getting pushed back and he did not start the development until he was in his mid 70s. With a rocky global economy he has now invested a large chunk of his retirement funds into a scheme that may not pay dividends for several years. While it was a dream that he had for many years it probably would have been wise if he had not pursued it at such a late stage in life. Again he could have benefitted from meeting with a qualified financial advisor who could have helped him work out the length of time required to recoup his investment and the impact that that would have on his financial health.
The keys to making good decisions in your senior years would include but not be limited to:
1. Consulting and following the advice of a good financial planner
2. Taking the time to make good decisions. Don’t be pressured into making quick decisions because of deals that will only last for a short period of time. If they are that good they will be around tomorrow
3. Talking to family members and friends who have your best interests at heart
4. Letting your head rule your heart when it comes to fulfilling your dreams. Many people may think about how they will feel when the dream is accomplished but this should be balanced with a realistic assessment of achieving the dream.
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