Celebrate National Senior Independence Month

Harwood Wealth Management |

Financial independence is desirable at any age and stage in your life. But when you are a senior, it might be the difference between enjoying a stress-free retirement and having to continue to work longer to satisfy financial concerns.

Retirement may be scary for some seniors who are unsure of their financial situation or what financial issues may be thrown their way. Below are a few tips for seniors that may lead to financial independence and enjoy less stress during their golden years.

Consider All Your Expenses

You may hear people mention when things are out of their budget. The unfortunate reality is few people have a drawn-out monthly budget, and fewer still actually stick to it.[1] Having a handle on your monthly expenses is vital to fully understand your financial situation and prevent you from spending money that you don't have.

Create a list of all your monthly expenses and be as detailed as possible. You should also include a portion of your budget to be allocated for possible emergencies. Once you have a clear view of where your money is going each month, it will be easier to spot any shortfalls or areas where expenses may be reduced.

Use the 50/20/30 Rule

When reviewing your budget, apply the 50/20/30 rule to see where your expenses fall.[2]

  • 50% of your budget should be used to cover all necessities, such as housing, insurance, and food.
  • 20% of your budget should go towards financial obligations. If you have debt, a portion of the 20% should be used to pay that down. The other portion should go into financial savings accounts, such as 401(k)s or Roth IRAs.
  • The final 30% of your budget should be used for personal expenses of extras, such as cable and cell service.

Avoid Taking on New Debt

While some debt can be leveraged strategically throughout life, when you reach your golden years you may want to avoid accruing any additional debt, especially large debts. You may be moving to a more fixed, regular income that might be capped lower than what you made previously.[3] It can be helpful to have saved enough for retirement to cover the necessities and the things that you want to do. Taking on additional debt, with large monthly payments may cause your budget to be thrown out of balance, and leave you coming up short.

If you are looking for ways to work toward your financial independence, LPL Financial is here to help. Our professionals have the experience to help seniors get on the path to financial independence so that they will enjoy their golden years stress-free.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial professional before investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.

The information provided is not intended to be a substitute for specific individualized tax planning or legal advice. We suggest that you consult with a qualified tax or legal advisor.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax free, as long as they are considered qualified. Limitations and restrictions may apply. Withdrawals prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change. --




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[1] https://www.prnewswire.com/news-releases/fewer-americans-are-budgeting-in-2019----although-they-think-everyone-else-should-300824384.html

[2] https://files.consumerfinance.gov/f/201603_cfpb_rules-to-live-by_my-spending-rule-to-live-by.pdf

[3] https://www.ncoa.org/news/resources-for-reporters/get-the-facts/economic-security-facts/