Many Americans are looking back on the previous year with a focus on 2024 as the weeks of 2023 come to an end. This may entail seeking methods to enhance their financial circumstances. Thankfully, there are lots of options available, regardless of age or price range. However, some strategies are better than others for older adults and seniors, many of whom may be reliant on Social Security and retirement funds.
I’ll outline three wise financial decisions seniors can make below to help them preserve their current assets and grow them over the coming months and possibly years.
As a senior, navigating the financial landscape can be challenging. With retirement on the horizon, it’s crucial to make smart decisions with your money to ensure a comfortable and secure future. Fortunately, there are several strategies you can implement to maximize your financial well-being.
1. Invest in Gold for Inflation Protection and Portfolio Diversification
Gold has long been considered a safe haven asset, offering protection against inflation and economic uncertainty. In times of rising prices, gold tends to hold its value, making it a valuable addition to any senior’s portfolio. Additionally, gold can diversify your investments, reducing overall risk and providing stability during market fluctuations.
Benefits of Investing in Gold:
- Hedge against inflation: Gold’s value tends to rise when inflation increases, protecting your purchasing power.
- Portfolio diversification: Gold can reduce overall portfolio risk by providing a non-correlated asset class.
- Tangible asset: Gold is a physical asset that can be easily bought, stored, and sold.
How to Invest in Gold:
- Gold bars and coins: Purchase physical gold bars or coins from reputable dealers.
- Gold ETFs and mutual funds: Invest in exchange-traded funds (ETFs) or mutual funds that track the price of gold.
- Gold mining stocks: Consider investing in stocks of gold mining companies for potential growth and dividends.
2. Secure Your Future with a Life Insurance Plan
Life insurance may seem unnecessary for seniors, but it can provide valuable benefits. A robust life insurance policy can protect your loved ones from financial hardship after your passing. It can cover end-of-life expenses, outstanding debts, and provide financial security for your beneficiaries.
Benefits of a Life Insurance Plan:
- Financial protection for beneficiaries: Ensures your loved ones receive a financial payout upon your death.
- Debt coverage: Helps cover outstanding debts, preventing them from burdening your beneficiaries.
- Estate planning tool: Can be used as part of your estate plan to minimize taxes and distribute assets.
Types of Life Insurance for Seniors:
- Term life insurance: Provides coverage for a specific period, offering affordable premiums.
- Whole life insurance: Offers lifelong coverage and builds cash value over time.
- Final expense insurance: Designed to cover end-of-life expenses, such as funeral costs.
3. Maximize Returns with High-Yield CDs
Certificates of deposit (CDs) offer a safe and reliable way to grow your savings. With interest rates rising, CDs are becoming increasingly attractive for seniors seeking higher returns. By locking in your funds for a specific term, you can earn a guaranteed interest rate, outpacing inflation and increasing your overall savings.
Benefits of High-Yield CDs:
- Guaranteed returns: Lock in a fixed interest rate for the CD term, ensuring a predictable return.
- Protection from market volatility: CDs are not affected by market fluctuations, providing stability for your investments.
- FDIC insurance: CDs are insured by the FDIC, protecting your investment up to $250,000 per depositor, per insured bank.
Choosing the Right CD:
- Term length: Consider the term length that best suits your financial goals and risk tolerance.
- Interest rate: Compare interest rates offered by different banks and choose the highest rate available.
- Early withdrawal penalties: Understand the penalties associated with early withdrawals before investing.
As a senior, making smart financial decisions is crucial for securing your future. By investing in gold, protecting your loved ones with life insurance, and maximizing returns with high-yield CDs, you can ensure a comfortable and financially secure retirement. Remember to carefully research and compare options before making any investment decisions.
Purchase a life insurance plan
Contrary to popular belief, seniors may find life insurance beneficial for a variety of reasons. It can pay for final costs of living after you pass away, or if you purchase a whole life insurance policy, you might be able to access it while you’re still living.
However, it’s also helpful for safeguarding your assets and those you love. Beneficiaries won’t have to worry about debt you leave behind if they have a strong life insurance policy because it will theoretically pay for any outstanding expenses. Additionally, it doesn’t have to be costly—you could be able to get paid six figures for as little as $100 a month.
Dont let your family members and friends come up short. Get a free online price quote to begin researching life insurance policies right away.
Speaking of inflation, this year has seen an increase in interest rates intended to counteract it (they reached a 22-year high in July). In this context, higher costs have been difficult for borrowers, but higher returns on savings have helped savers.
Making an instant certificate of deposit (CD) account opening is a great way to benefit from these returns. Even though short-term CDs have somewhat higher rates than long-term CDs, they’re still competitive and a terrific way to supplement your income. Additionally, your funds will be less accessible for impulsive purchases (you’ll need to pay an early withdrawal penalty to access them) and protected from the whims of the market (your rate will be locked for the entire term).
Although many people find the last few weeks of December to be very busy, it’s also a good idea to take stock of your personal finances during this time. It can be a good idea for seniors in particular to evaluate what was successful in 2023 and what they can do to further improve their financial situation in 2024. This can involve diversifying their portfolio and hedging against inflation by purchasing gold. However, for some seniors, it may also make sense to increase their financial security with a comprehensive life insurance policy and to grow their savings with one of the best CD accounts available today. But as with anything financial, to increase your chances of financial success in the new year, make sure to do your homework beforehand.
The managing editor of CBSNews’ Managing Your Money section is Matt Richardson. com. He creates and modifies articles about personal finance, covering topics like investing, insurance, and savings.
3 smart money moves seniors should make for 2024
These are three wise financial decisions that seniors can begin making now for 2024.
I’m sure you’ve seen the commercials on television touting the advantages of investing in gold, but do you really know what that investment can do? Well, to start, it can act as a hedge against inflation by holding onto its value—which may even rise—when the dollar’s purchasing power declines.
However, it can also aid in diversifying a portfolio that would otherwise consist of bonds, stocks, and real estate. In the event that those other asset classes perform poorly, gold can act as a buffer. When bought as gold bars and coins, it can also serve as a tangible investment because they are simple to buy, store, and sell (you can easily do so online right now)
As the new year draws near, it might be worthwhile to consider investing in gold for all of these reasons. Learn more about this unique investment opportunity here.
Personal Finance for Older Adults (Including Senior Citizens/Retirees) in One Minute
FAQ
Where is the safest place to put your retirement money?
How much cash should a 70 year old have?
What is the best investment for a 70 year old?
Should seniors invest?
However, with safer investment options and a diverse investment portfolio, seniors can have peace of mind and earn money with minimal risk. For example, safe investing can be a good option for seniors looking to pass down money to family members or pay for long-term care. FYI: Investments should play a part in your overall estate plan.
How can older adults make the most of their retirement savings?
To make the most of these accounts and your retirement savings, Dogan recommends that older adults first take advantage of company matches from their employers. Next, seniors should max out any tax-advantaged accounts, including 401 (k)s, IRAs, or HSAs. Life happens, and sometimes retirement goals get put on hold.
How do finances affect your life as a senior?
Financial matters affect the lives of all Americans. But, as a senior, finances may play an especially large role in your well-being. After all, at this stage of life, priorities often change. And new realities may influence your spending and saving habits.
What financial topics do older adults need to know?
This guide covers essential financial topics for older adults, including ways to ensure you’re cashing in on tax credits, deductions, and senior discounts. We’ll also detail important ways to prepare for taking Social Security, building your retirement portfolio, and ensuring your estate is in order.