Keep Up with Seniors Spending Down Funds

In an appointment with my financial advisor after I’d reached my senior years, she said to me, “I want to be sure the funds in your accounts last long enough for you to be comfortable for the rest of your life.” Based on that, I’m sure she’d sound an alarm if I suddenly raided my retirement savings.
     Prevention might be better, though. How can those concerned about the financial welfare of seniors spot those most likely to unwisely withdraw from their portfolios?
     A pair of financial planning faculty members at Texas Tech University analyzed investment accounts, demographic data, and personality profiles for 3,678 American adults. The average age of the 3,678 was 70 years. The portfolio withdrawal rate was computed as portfolio distributions for the year divided by total financial assets.
     The profile of someone most likely to make withdrawals was an older married senior who expected to live another ten years and had credit card and family loan debt. Drawing down the retirement account was not necessarily unwise for these people. Paying off debt is good, and the older you are, the less future you need to save for. The only indicator here of a foolhardy approach is that people who planned to live for another ten years might want to preserve funds.
     Among seniors least likely to make withdrawals from retirement accounts were those with a college education who wanted to bequeath to others. Personality characteristics associated with this were conscientiousness and confidence in managing finances as shown by thorough knowledge and clear organization of their income, debits, and expenditures. These are indicators which a financial advisor and others concerned about the senior’s financial wellbeing could assess.
     An absence of these personality traits should signal a need to regularly caution the senior about excessive withdrawals, especially if the absence occurs alongside indicators of impaired financial capacity, such as:

• Declines in payment management skills. Difficulty issuing payments or keeping records while carrying out everyday transactions.
• Arithmetic mistakes. Errors making or receiving change to pay for items at the store or when computing an appropriate tip in a restaurant.
• Memory lapses. Failing to pay bills or paying the same one several times.
• Disorganization. Losing track of financial and other documents.
• Impaired judgment. Abiding interest in get-rich-quick schemes or unfounded anxiety about the nature and extent of one’s personal wealth.
• Conceptual confusion. Difficulty understanding basic financial terms and concepts such as mortgage, will, or annuity.

Successfully influence the most prosperous & most loyal consumer age group. For the specific strategies & tactics you need, click here.

Click for more…

Protect Seniors from Poor Financial Capacity
Resolve Identity Crises for the Elderly