Many seniors find that their later years are far from golden. According to one report, "Graying of U.S. Bankruptcy: Fallout from Life in a Risk Society," from Indiana Legal Studies, money woes are increasingly plaguing the over-65 crowd. In fact, 1 in 7 people who files for bankruptcy is 65 or older, a roughly fivefold increase in nearly three decades.
How can you avoid being in that number? Avoid missteps like these:
Look before taking an entrepreneurial leap
Retirees sometimes start businesses without doing much upfront research. “They often use a lot of their nest egg to start the business. This can be dangerous. Some retirees even sign personal guarantees to obtain necessary funding, without thinking of the potential ramifications of not being able to pay back those funds,” says Christopher Congema, a certified financial planner with Landmark Wealth Management in Melville.
Stop being the family piggy bank
Retirement is about you. It’s time to do away with extravagant gifts and for children and grandchildren to fend for themselves. “It’s difficult for many parents to deny their children, even if it means putting themselves at financial risk,” says Andrew Schwartz, a financial adviser in Hauppauge.
Prepare for unexpected medical expenses
Health care costs are the wild card in retirement. Out-of-pocket expenses for an injury or chronic illness add up. Says Leslie Tayne, a debt resolution attorney with the Tayne Law Group in Melville, “Be pre-emptive, maintain an emergency fund. If a medical crisis occurs, ask for an itemized bill and look at it closely. Be sure all items listed were actually used during the hospital stay. Consider supplemental insurance to cover what your primary insurance doesn’t.”