While poverty is an issue for every age group, it is a particularly significant one for seniors. Not only are seniors especially vulnerable, but rates of extreme poverty among seniors are far too high. In fact, some estimates suggest that roughly 72 million older adults will be in poverty by 2030.
Many factors can influence the risk of poverty, including areas like politics and policy. Some of these may be uncontrollable by the senior, but there are other important areas that can be influenced.
The items below are key areas that can easily lead a senior into poverty. Targeting these areas can help seniors (or their caregivers) decrease the risk of poverty, while promoting a healthy and safe life.
1. Not Planning Financially
Financial planning can be scary and it’s often overlooked. Some people find that the whole process simply seems overwhelming, while others don’t want to think about the future.
Even so, talking about finances is critical.
Doing so can provide insights about the senior’s current financial situation and their future needs. This is even true for seniors who don’t think they face financial issues.
When looking into finances, don’t just rely on income as an indication of financial need. Multiple articles (including one by Futurity) suggest that we need to look at other factors too, such as the money that seniors are spending.
After all, seniors often have multiple expenses, like medical bills and housing. These can quickly add up and some may be higher than expected.
Thankfully, financial planning doesn’t need to be difficult. You can even start off simply by using a budget planner like this one from Clever Fox.
2. Not Thinking About The Future
It’s easy to assume that everything will be fine because it is right now. But, things change and they often do so suddenly. A health crisis, a sudden need to move or the loss of a loved one are all areas that can have financial impacts on a senior.
Expenses can also increase for predictable reasons. For example, some seniors have additional needs as they age. This could include a reliance on assisted living or the need to have extra support at home.
These areas reinforce the need to ask the hard questions and to seriously talk about future financial needs. Doing so helps ensure that seniors will have the money when they need it.
Don’t worry if you don’t know where to start. There are many experts out there. For example, the book How to Care for Aging Parents highlights a wide range of topics, including financial and housing issues.
3. Falling for a Scam
Seniors often seem like an easy target for seniors – and seniors are often victims of scams. In fact, changes to the brain with age can make seniors uniquely vulnerable to scams.
Even without this issue, scams are always a risk.
Scam artists are clever. They’ve found many ways to exploit human weakness. The right scam at the right time might convince even the most intelligent person.
A senior won’t always know that they’re getting scammed or may not be willing to talk. But, there are key indicators, like bills not getting paid, a sudden change in financial patterns, an apparent increase in stress or the senior suddenly being very reluctant to talk about finances.
4. Living Outside of Their Means
Many seniors live on a fixed income, one that often has little flexibility. Adjusting to this can be difficult, especially for seniors who had more income previously.
This issue, along with many other potential factors, means that seniors often spend more money than they should be.
Thankfully, there are ways to improve the situation, such as cutting down spending, looking for tax help, finding discounts, decreasing medical costs and downsizing to a smaller home.
5. Unaffordable Housing
Housing can get expensive fast and it is an essential cost. Still, there are ways to decrease the cost of housing.
- Find the right home. There are many affordable housing options, including locations that specifically cater for seniors.
- Look for funding. You may be able to find funding or subsidization options that significantly decrease the cost of housing. Look in your local area and talk to senior centers to find out about any options available in your area.
- Downsize. Seniors often want to age in place. This can include staying in the same home. In practice, seniors often need smaller places to live. Downsizing tends to decrease financial costs (including energy bills), helping to ensure that the senior can afford where they’re living.
6. Health Costs
Seniors often face multiple chronic health conditions, like diabetes or mental health challenges. Conditions can interact with one another and create many different financial implications.
The cost of medication alone can be a problem, even for people on Medicare. Hospital visits and ambulance rides can quickly become expensive too.
Some of these costs are unavoidable, but caregivers can help to minimize them. Talking to your family member’s doctor is one important approach. This can improve coordination and help ensure that your loved one’s health needs are always taken care of.
Effective medication management can help too – decreasing the risk that seniors will end up in hospital because of medication challenges.
7. Debt & Loaning Money
Debt often accumulates over the course of one’s life and can be a serious problem once people are on a fixed income. Some seniors find that they don’t have the means to regularly make payments.
Creating financial plans can help. You could also look at combining multiple debts. Some companies specialize in this area, providing your family member with a lower interest rate. Just make sure you research carefully first.
There is also the risk of getting into debt, especially around holiday seasons.
After all, it’s pretty easy for people to spend money these days. Many companies also grant credit easily, allowing members to buy expensive items and pay them off over time.
With low monthly repayments, such plans can be enticing. Yet, members often end up paying much more than their items are worth. This can easily contribute to poverty, especially for people who are on a fixed income.
Loaning out money is a problem too. Even if the loans are small and infrequent, the financial cost can still add up. You may even find that some family members try to take advantage of the senior.
8. Losing a Spouse
The death of a spouse can be devastating emotionally. It also has strong financial implications.
Seniors often find that their social security benefits may change as well. This can make it harder to stay independent and is another reason for planning ahead.
A senior may have one (or many) of these factors and not be in poverty. Even so, it’s important to watch out for the areas. Being aware of them can help to significantly lower poverty risk and protect your family member.
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