Money Matters: All You Need To Know About Your Budgetary Concerns And Ways of Dealing With Them

Money matters in every phase of life, even in your silver years. Here’s how you can know about your expenses and tackle them smartly post retirement.

Money is one of the chief areas of concern in one’s older years. Reason: leaping expenses and a limited flow of income. This is exactly why it is essential for all older adults to know about the priority areas of expenses and be well-armed to tackle budgetary challenges. Your post-retirement phase of life can be the best if your financial planning is in place and in accordance with your income possibilities. Here are some budgetary concerns that most seniors face after retirement. These are also areas of maximum expenditure for older adults above 60.

Healthcare: Medical and healthcare expenses happen to be the main expenditure and budgetary concern for those who are 60+. Dr Padma, 71, senior chief medical officer (retired), Central Government Health Scheme, says, “For anyone above the age bracket of 60 years, healthcare is the sector where maximum money goes. You will hardly find anyone without a chronic or an age-related ailment. Those suffering from conditions like Diabetes, Hypertension, heart-related disorders, Dementia and more have to be on regular medication.”

“Those with chronic disorders like kidney and liver failure and other fatal conditions like cancer have to go through a tedious process of treatment and all of these stages of these are extremely costly. For patients with cancer, rehabilitation also becomes an important post-treatment part for which loads of money have to be spent.” Not just their own medical expenditure, several recently retired seniors have to take care of their parents who are super seniors (above the age of 80) which too involves considerable cost and expenses.

Food and lifestyle: Food and maintenance cost ranks second in terms of the areas of expense for older adults. It is important to maintain a good quality life, eat the foods, exercise daily and take supplements of vitamin and minerals to remain fit and healthy. All of these are costly and need considerable expense. With more older adults living on their own, there is dependency on a variety of services like that of a driver and caregiver, which could also add to the expenses.

Chandrika Desai, 72, an entrepreneur, agrees, “Seniors need companions to be with always as loneliness is one of the major issues they suffer from. Not just that, age makes us dependent on a helping hand as it becomes difficult to do everything on our own. This is where we have to bear the livelihood cost of these helps as well along with looking after their medical needs. After a certain age, a companion becomes the necessity to tackle any kind of emergencies and more,” she says.

Travelling: Many older adults use the post-retirement years to travel. Those who are physically fit finally get enough time to explore the world, go on pilgrimages and visit their children who are either overseas or in a different city. Travelling today isn’t reasonable and comes at considerable cost. Starting from conveyance to lodging to food, to medicines for an emergency, seniors have to bear costs for all of these.

Besides these, there are costs for socialisation, as many seniors want to join communities and groups of like-minded people, become members of clubs and libraries to have access to a social group. These come with their own cost.

Also, there could be costs like home rentals in case of senior citizens who do not own their homes; maintenance cost for own homes and sometimes, even the cost of taking care of offspring who may not be settled yet. Some seniors are fortunate enough to get their kids settled in terms of education, career and marriage before retirement, while others have to bear the cost towards their children’s education or marriage even after retirement when these could add to the financial burden.

Roopa Shankar, a finance consultant and managing partner of RS Consultants, said: “Apart from the already mentioned areas, there is another finance-related trouble among seniors post-retirement that keeps them stressed. Although they no more have a steady income flow every month, they cannot give up the habit of monthly savings which becomes naturally difficult after retirement. This is a bit of a psychological issue and needs a change in their mindset to overcome the dilemma.”

THINGS SENIORS CAN DO TO TACKLE EXPENSES

Srikala Bhashyam, finance consultant and managing partner at RS Solutions has this to say: “While around 50 per cent of the monthly budget of seniors is spent on medicine, food and lifestyle, travelling and socialisation claims another 20 percent of the budget. 15 percent to 20 percent is spent on the healthcare of old parents, some may have a house loan to close it and spend less than 10 percent towards it. Thus, they are required to be armed up to tackle their budgetary expenses without any inconvenience.” Bhashyam suggests few ways by which they can deal with these.

“First, older adults must not just rely on company health insurance and go for independent health insurance cover to meet healthcare expenses in the later stages of life. This is mainly because after retirement, none of them can get insurance cover from their respective companies apart from those working in central government. Second, 30 percent of their income has to come from a steady source like pension (for those who are government employees), fixed deposits, rental income and any other alternative incomes,

“Apart from this fixed income, senior citizens must also have mutual funds, real estate and stocks as variable sources of income to support them for their trips abroad and other emergency needs,” she adds.

How do senior citizens tackle these challenges in terms of managing their monthly expenses? We spoke to some senior citizens and found out what they have done to cut costs post-retirement. P Mukherjee from Dhanbad, 61, a retired bank manager and an avid traveller always books train tickets instead of flight tickets for his trips. “I prefer rail tickets as they are comparably cheaper. This helps me to save some amount and spend that on better lodging and other related costs. Also, post-retirement, I do not have any rush, hence I enjoy train journey even though it takes longer.”

M Chatterjee, a retired school teacher from Kolkata, 61, has found out a great way of reducing cook expenses. She orders food from a local home delivery service that offers reasonable thalis and breakfast plates. “While earlier, I used to spend a considerable amount on my cook, after retirement that became a concern. After some research, I came to know about this catering service that has lessened my expense on food. Instead, I have now joined aerobics classes to deal with my Diabetes and Arthritis and I am doing far better now,” said Chatterjee.

Financial assistance that aids seniors cope with expenses

Nandini Amogh, senior manager and Aparna Mundani, relationship manager from PeakAlpha Investment Services Pvt Ltd have highlighted the kinds of financial assistance seniors can seek in order to manage their budget smoothly. Several budgetary tools and applications are available to help track monthly and non-monthly expenses factoring in inflation. “Discussing retirement plans and goals with a financial planner will help you distinguish between those that are achievable from the ones that are overreaching. Making sure that you utilize all avenues of tax saving can be of immense help,” says Amogh.

Mundani added: “It is important to keep oneself financially updated and aware of the changing financial systems and processes. You can protect your assets by talking to someone at your bank, an attorney, or a financial advisor to discuss your options for managing your money and property in the event you become incapacitated. Proper estate planning will ensure that you leave behind wealth and peace.”