A guide to managing finances effectively for the elderly – Business News

A guide to managing finances effectively for the elderly – Business News

As tectonic shifts and family structures are seen in India in our society, moving away from joint family systems, loneliness has become a cumbersome problem among the elderly population. The number of senior citizens living alone has increased considerably for many people in old age, but it has not increased well in terms of quality of life.

According to a survey conducted in 2017 by the Eggwell Foundation, an NGO that is actively working for the benefit of senior citizens, 47.49% of the elderly in India suffer from loneliness. People living in urban areas suffer from worse conditions, with 64.1% of the elderly suffering from loneliness, compared to 39.1% among the rural elderly. The enlisted survey found decreased interaction with family members, poor health, isolation, and the unavailability of social interactions as the main factors for loneliness.

For those who are not fortunate enough to support their family members, financial security can play an important role in meeting some of the needs of living alone. For example, the lack of monetary resources can increase the problems facing the elderly as the option to receive proper care and support from outside may also be ineffective, especially during emergencies.

Asset Allocation and Inflation

Many people make the mistake of factoring in the effects of inflation in their old years as just an idea. Not calculating how inflation can affect your financial reservoir over time can be a huge mistake.

Parvati Iyer, chief investment officer at online investment management platform Famewealth, emphasized that the impact of inflation in the post-retirement years should not be underestimated when allocating assets. She says, “When planning for retirement, it is essential that asset allocation be tweaked keeping in mind the risk tolerance, desired corpus and time of retirement. The desired corpus must take into account the debilitating effects of inflation post retirement. If started early, a good performance for equity mutual funds often helps to achieve retirement corpus goals easily without the need to be highly aggressive. Debt mutual funds can also be selected and matched for that asset allocation. “

For a person saving for retirement, it may seem difficult to generate returns that can beat inflation. It is not, provided it invests wisely in mutual funds. Worldwide, mutual funds have been highly successful in creating long-term wealth.

Will ask for cooperation in money matters

For senior citizens, it is important to make someone trustworthy for their finances from the privacy of their family. In most cases, older people entrust their children to manage their money so that in any emergency, using money is not a hassle and also because our social fabric is woven in such a way that most of the elderly For people, their children are the biggest support system. It has more importance in the case of senior citizens living alone.

Sudhir Singh (name changed), a retired government official who lives alone in Kolkata, says, “I have been living alone for some time now – my wife passed away many years before my retirement. My daughter is settled in a different city and I have kept her in the loop about every aspect of my money matters since the demise of my wife, so that she is ready to handle my finances, even if I am on a stage Reach where i can’t. “

Her daughter Priyanka tells that she keeps a tab on her finances so that she is ready in any emergency or if such a situation arises when she may have to step down. He said, “It would be stupid to imagine at a time when my father would not have the mental agility to manage his finances by himself. I don’t want to wait until that day to find out the intricacies of one’s finances as soon as possible “It is a heroin’s job to determine if there should be an emergency. Getting adult child support also ensures that seniors do not end up in bogus investment schemes,” she explains.

Factoring in deeper aspects of life

While most people take into account the high probability of inflated medical bills in the late stages of life, there is a tendency to believe that health problems will not begin soon after seniors join the league. The experience of Amrita Roy suggests that the punishment can be wrong and can lead to problems later. “My husband was bedridden within a year of retirement due to Parkinson’s illness. His condition was so bad that we had to appoint two nurses to help him in his daily activities. He died eight years later and by that time, our retirement reservoir had decreased significantly due to the additional medical expenses incurred in all our years. I have been living alone ever since – my daughters live in different cities and I think we should have taken health concerns more seriously when we planned our retirement. Our health insurance policies also do not provide adequate coverage.

Iyer states that senior citizens have a tendency to underestimate the impact of health-related emergencies. “The most obvious and important issue that they need to deal with is adequate health insurance quickly – hassle free, no questions asked, kind of. Even if it costs a little! A simple drop in the bathroom can wreak havoc on their savings – Most seniors ignore this.

Iyer advocates the mantra of simplicity and stability for senior citizens, when it comes to managing finances. She explains, “Standard government zero-risk schemes are best suited to senior people looking for a steady monthly income from their investments. Bank FD is a safe bet even if tax returns are low. Many seniors are not tech-savvy, so the online investment option is best avoided, even if a friendly neighbor is there to help. Since some equity exposure is always a good idea, investing in mutual funds through offline channels is an option. However it should also be kept in mind that many options, information overload and lack of expertise become major problems over time. Similarly the investment that is spread around makes it difficult to manage when there is no one to help. So it is best to look at two or three devices overall. Well-off seniors are often seen leaving behind something for their grandchildren. They should definitely invest that part of the property in aggressive mutual funds for a long period.

No one can estimate how much money is enough for old age because your financial needs will be colored by myriad factors such as your or your spouse’s health status, your family responsibilities, social obligations, your life span, etc. To ensure that you are competent. To meet all these needs in your old age, it is important to plan in advance.

key takeaways

• If started early, a good performance for equity mutual funds often helps to easily achieve retirement corpus goals without the need to be highly aggressive. Debt mutual funds can also be selected and matched for that asset allocation.

• If you do not have medical insurance, you should definitely get one and if you already have one, it is important to periodically review whether it provides adequate coverage. Old age can trigger various health ailments and a good health insurance plan will provide you the necessary financial support.

• Older adults, especially those who are not technically savvy, can be easy targets for financial fraud. Family members can reduce that risk by installing alert sending systems in case of large withdrawals or any suspicious account activity.

• Take care when taking a loan as it becomes difficult to free yourself from the debt cycle when your income is limited and it can become a major cause of stress.

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