(This article previously appeared on Gobankingrates.com.)
Many of the nation’s 77 million American boomers will have longer lifespans than their parents. This means a time will come when some of the costs to care for them in their later years could be passed on to their children.
If you’re a boomer, check out the following seven tips to help you cut costs and save more money, so you can avoid becoming a financial burden to your kids and financially dependent on them:
1. Size Up Scaling Down
Buying a smaller house or condo can go a long way to helping you save money on utilities, property taxes and mortgage payments.
(MORE: The Homes of Today's Retirees)
If your current dwelling is already paid off, you can use the proceeds from its sale to purchase something cheaper. Your remaining capital can then be invested into a high-yield savings or investment account, earning interest as a buffer to cover your living or medical expenses without the need for financial help from family.
2. Pay Down Your Debts
If your house is paid off, you might want to sell it, using the principal to buy a more affordable residence, with some leftover money in the bank. Work out a budget and try allotting some of these funds toward paying down other outstanding debts, like a car loan or credit cards.
Set a goal: Try to be debt-free by 70. Then, strive to pay for all future bigger-ticket buys with cash.
(MORE: When It's OK to Retire With Debt)
Minimizing your debts means avoiding placing them in the hands of loved ones. (For more on this, read “9 Ways to Overcome Debt in Retirement.”)
3. Spread Out Finances Without Spreading Yourself Too Thin
If your debt is too large, or home or car ownership is several years of debt away, consider other avenues to saving money. For instance, if you’re divorced or widowed, you could find roommates to share expenses. Also, look into applying for state aid to help pay for utilities and other necessities and investigate whether your city offers housing for low-income or senior residents.
4. Make Maximum Use of Medicare
This tip is a must for anticipating health care expenses. There are several elements to Medicare (which kicks in at age 65), but usually, the government’s health care system covers 80 percent of all outpatient doctor’s visits or expenses. For inpatient hospital stays, Medicare pays for the first 60 days. If you don’t have private insurance, Medicare should cover you for everything from surgical procedures to a flu shot.
(MORE: What Medicare Doesn't Cover)
5. Embrace Senior Discounts
Take advantage of senior citizen discounts when they’re offered and you qualify. Become a card-carrying member of AARP; inquire about senior discounts when you dine out, travel or go to the movies and ask your auto insurer when it’s time to renew your premium.
6. Plan for Funeral Expenses
Yes, it’s an uncomfortable topic to think about and discuss, but a necessary one. Funeral expenses can be a costly burden on surviving, grieving family members who are left to foot the bill.
Consider a number of money-saving avenues, such as prepaid funerals; local, state or nonprofit burial aid or a special end-of-life savings fund.
Don’t be afraid to discuss your plans with your children and survivors; your transparency expresses that you care for their welfare, and yours, personally and financially.
7. Don’t Become Financially Stagnant
This means: don’t overlook new ways of investing or saving money just because you’ve stopped working full-time.
See how you can divert some of your finances into higher-yield deposit accounts, such as CDs or money markets. Look into a health savings account as a way of supplementing your medical expenses. If you don’t have a financial adviser, look into getting one.
Above all, take note that it’s OK to ask your children for help if it’s absolutely needed — but these tips should be a starting point to begin preparing you for the years ahead.
Paul Sisolak is a writer for Go Banking Rates, where he publishes articles about personal finance, business and consumer trends and fiscal frugality.
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