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9 Financial Decisions You May Regret Later

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No one is perfect. If we were, we wouldn’t be needing to address regrets and mistakes. You’ve made many mistakes in your life, and there are going to be multiple times when you’ll make more. The only thing you can do is learn from them. But sometimes, the mistakes we make have to do with our money and finances. These can be small accidents we can bounce back from, like paying your internet bill a week late, but others can be larger ones that can really hurt you later on.

 

This article is designed to tell you about the nine financial mistakes that you may possibly regret later, and why you will want to avoid making them. Let’s get right into it.

 

Not saving your money

This one is obvious. It always seems enticing to spend your leftover cash flow for other things,

like nights out or new items, after you take care of your necessary payments, like your bills. It seems harmless at the moment, but this will leave you little money for your future.

 

This is especially true when you think about your retirement. When you retire, there are payments you are still expected to pay. This can be insurance premiums, mortgage payments (unless you sign up for a reverse mortgage), final expenses and more. Although you will be receiving other incomes, like your 401(k) and Social Security, these may not be enough. Undoubtedly, you will need to have a separate savings fund to tap into when you retire. This will help cushion any unexpected expenses or bills.

 

Save your money and prepare for retirement while you are doing it. There are budgeting apps available, but The Best Senior Services is also here to help connect you with an agent who will get you navigate budgeting.

 

Buying what you know you don’t need

This could be multiple things, ranging from small knick-knacks to designer clothes to cars. Believe it or not, people buy things just because they can, not because they need to.

 

If there is a purchase that you are facing and you cannot picture yourself using it often and consistently, it may be better that you don’t get it. Now, this isn’t to say that you should never buy yourself something fun every once in a while. But if you are constantly purchasing things you don’t need, you will be hindering yourself in the long run.

 

Not investing as soon as you can

You will want to start investing as soon as you possibly can, and this is why: when you invest money now, it grows later. So, let’s say you invest $200 a month over a ten-year period. You would think that you would only have $2,400 saved, but in reality, because of accumulating interest, the amount will be higher. This is all because of a great strategy known as compound interest, which is the additional interest to an initial amount of a deposit.

 

A lot of people are scared of investing because they don’t want to lose their money. If you’re thinking to yourself, I’m not rich enough to invest, you’re wrong. You don’t have to be rolling in money to be able to begin. Anybody can get started by simply downloading apps, visiting with a broker, or investing through your employer.

 

Deferring loans

When you’re younger, one of the first loans that you will likely be responsible for is student loans from college. When you graduated from undergrad, and you might have had the option of moving onto graduate school. Doing this allowed you to defer your loans or paying them at a later date.  That might have been something you passed on, or it was something you felt like you needed to do at the time.

 

You’re not in your college years anymore, but deferring loans is something you are very familiar with now that you have been acquainted with it. That’s because you don’t just have to defer your student loans. There are others out there that you can put off, too, like personal loans.

 

This is something you will want to avoid doing. Interest is almost always added onto your loans and will likely accumulate even while they are deferred. Although there are interest-free options, that doesn’t guarantee that you will have interest-free deferments.

 

Work out a payment plan with a financial specialist to figure out how you can begin paying off any loans you have at the moment so that you don’t have to pay more at a later date.

 

Relying on your credit card

Sure, credit cards are great. At least, until it’s the end of the month, and you realize you might have made a few too many purchases with it. Credit cards are great in the sense that they allow you to build upon your credit. Using your credit card will also earn you points and bonuses that you can use at a later time. If you use it wisely, then you will help yourself out of debt and promote financial well-being from the bonuses you will receive. However, credit card debt is easy to fall into, yet incredibly hard to pull yourself out of.

 

Try limiting the use of your credit card and use it for small purchases. Using it for smaller purchases will lead to smaller bills that are easier to pay off. After a certain amount of time, you’ll start to get the hang of things and depend less on the card.

 

Buying the newest version of everything

It can be really hard to stay away from new things sometimes. Let’s take Apple for example. Every year, Apple updates its iPhones. Apple also regularly updates its laptops, desktops, iPads, watches and more. A lot of the time, the company’s newest features are extremely desirable, and as a result, many people upgrade their old phones to get it.

 

The bottom line is, many people forget how their technology, clothing, appliances, and more are built to last for as long as they can. Buying the newest version of things will hurt you in the long run because you will find yourself in what seems like a never-ending cycle of funding wants over needs.

 

Living above your means

When you were younger, it’s likely that you didn’t start out making as much as you do now. As a result, you probably lived below your means, meaning you didn’t go out and buy unnecessary things. Once people get older, and generate a better income, they tend to start living above their means. This means that they begin to purchase things that they can go without.

 

Living above your means is one of the worst financial mistakes you can make because you’re not leaving yourself any extra income. In the long run, you are hurting yourself by living this way.

 

If you have a sudden family emergency, or you have a pet that needs to go through surgery, you won’t have the money to support the situation. Begin living below your means so that you can be prepared for whatever emergency happens, and so that you can gain control over your bills and other payments you need to make.

 

Taking from your 401(k) early

Just because you have the option to pull from your 401(k) before your retirement, it doesn’t mean that you should. If you do this, you get penalized by the IRS. In fact, it will hold 10% of your withdrawal as taxes if you are under the age of 59 ½. Not to mention, if you pull the money out now, then you won’t have that money saved for your retirement.

 

If you still feel like you should pull from your 401(k), make sure that you re only doing this as a last resort. You do not want to do this if you have any other means of acquiring your needed money. One possible method is taking out a loan against your 401(k). Doing this means that you will replace the funds at some point.

 

Listening to get-rich-quick schemes

This last mistake we are mentioning is a big one that you will definitely regret later in life. If life were easy, we’d all have pockets overflowing with cash. There is no true way of “getting rich quick,” and if there is, it may not be completely legal. In fact, these get-rich-quick schemes are likely to be scams. Most of the time, the people who are trying to “get you rich” are actually taking your money.

 

Some of the get-rich-quick schemes that you’ll want to say far away from include:

  • Internet business opportunities that require a down payment to be a partner. It’s likely that if a business idea is proposed to you online, it’s a get-rich-quick scam. You probably don’t know this person, and he or she is now asking for your money to be a part of the business. This is something you will want to avoid, or at least heavily investigate, because it’s likely that you won’t receive a penny back.
  • Investing in a company that withholds vital information from you. This is a major red flag. If there is an opportunity for you to invest in a company, but the company is refusing to tell you information like price-to-earnings ratio, debt-to-equity ratio, dividends, etc., then you need to immediately decline the offer. Your investment will go nowhere.
  • Lottery tickets. There is nothing wrong with occasionally playing your hand to see if you’ll hit it big. However, if you are relying on the luck of winning the lottery, then you need to quit while you’re ahead. In fact, your likelihood of hitting the jackpot is about 1 in 13.9 million.
  • House flipping. Unless you are a professional, this is something you want to avoid doing. Many homes require more repairs than you might expect, and as a result, you’re faced working on a house that should have been demolished. This is an unfortunate circumstance to find yourself in, especially when you think about the money you have drained into this. Avoid house flipping DIYs so that you can save yourself the money in the long run.

 

Making financial mistakes happen. It only goes to show that we are human. However, identifying financial mistakes that are common is key to preventing them from happening to you. If you still need more guidance in making the best financial decisions for your future, we are here for you at The Best Senior Services. We educate you and other seniors and connect them with a local licensed agent because helping you is what we do best. Contact us today by calling 855.979.8277 or visit our website.

 

When to Enroll in Social Security

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If you’re nearing your 62nd birthday, you’ve probably heard from the Social Security Administration (SSA) a few times in regard to signing up for your Social Security benefits. And, if you’re worried about not knowing what to do, don’t be. Social Security is a tricky concept, and signing up for your benefits is equally as confusing because there are many things you need to consider when signing up.

 

There are three ideal age categories in which you will want to sign up for these benefits. They are: 62, 66 and 70. Age 62 is the earliest in which you can sign up, 66 is your full retirement age and age 70 is the latest in which you can sign up. We will get more into the importance of these ages in a moment, but let’s first understand what Social Security benefits are and what qualifies you for them.

 

What are Social Security benefits?

Social Security benefits are payments that are made to retirees or to those who are disabled, as well as their spouses and family, as applicable. It is assigned as a partial replacement for the income for those who are qualified.

 

Here are some of the advantages and disadvantages to Social Security:

 

  • Advantages:
    • Social Security makes it possible for you to receive healthcare. The payments that retirees receive could be used for health treatments that they otherwise would struggle to pay for.
    • The government insures Social Security. That means, regardless of the economic climate, you will receive your benefits.
    • Collecting unemployment will not reduce your Social Security benefits. This is because Social Security does not count unemployment as earnings. Of course, you must factor in your age to how much you will receive.
  • Disadvantages:
    • Inflation does not go toward calculation. What does this mean? It means your payments will remain the same forever, regardless of what happens. Let’s say your cost-of-living increases, meaning the prices for your housing, healthcare and others become more expensive. Your Social Security benefits will not be increased on account of this.
    • There are limits on eligibility. This means that not everyone who is of retiree age, or disabled, can qualify. This includes those who don’t have a steady work history or immigrants who came to the United States later in their lives. Before considering Social Security benefits, you have to decide whether you are eligible.
    • Working while collecting Social Security benefits may temporarily reduce how much you receive on payments. This is only applicable if you earn over a certain amount of money, however.

 

What makes you eligible to receive Social Security?

There are a lot of requirements that you must meet before you are fully eligible for Social Security benefits. On top of being a retiree or disabled, you must have been paying into the Social Security program during your years of employment and accrued 40 credits. You can earn up to four credits a year. A credit is earned whenever one makes a set amount of money. The number changes every year alongside inflation.

 

You must also apply for Social Security benefits. You can apply online with the SSA or over the phone by calling the toll-free number at 1-800-772-1213. You are also able to apply for Social Security benefits in-person. When you apply, there will be information you need to expect to provide. Below are a few examples of what you should have prepared:

 

  • Your Social Security number
  • W-2 Form or self-employment tax return
  • Proof of U.S. citizenship — or Green Card, if you were born outside of the United States.
  • Financial institution information. This is information pertaining to your banking account, like your routing number.

 

The best time to sign up for social security

There’s not a blanket timeframe that applies to everyone in terms of when they should sign up for Social Security. However, the longer you live, the more appealing it is to take it later. This is because you’ll get more money for a longer amount of time. Easy, right? Well, unless you know exactly what age you’re going to live to, it’s hard to say. You can begin collecting benefits when you are 62, but the earlier you draw, the less you will receive on your payments. That works in reverse, too. The later you draw, the more you will receive on your payments.

 

Because no exact time is the best time, you should sign up for Social Security when it is best for you. A great way to get started on your discussion of which age is best for you to start drawing benefits is the Break-Even Analysis chart. This chart will compare how much money you’ll receive based on when you decide to sign up for Social Security — at age 62, 66, or 70. The chart will take into consideration your income and how much you will be making per month, depending on what age you are when you sign up.

 

Although this chart will help you get the ball rolling in your decision-making process, it should not be used when making your final decision. There are other things that you will need to consider when choosing to collect earlier or later:

  • Should you delay benefits?

    • The most important factor you should consider when delaying your sign up is your health. The healthier you are, you are more likely to be able to delay receiving your benefits. If you wait until you are 70 to receive your Social Security benefits, then you will receive a 32% addition in the number of benefits you receive.
    • If you are still able to work at 62, or you have other assets that will help with any pressing financial needs, you will also still want to consider delaying your claim. Because you will be taxed on that income, it’s best to wait if you know that you don’t need the money immediately.
    •  Another advantage to delay signing up for benefits is if you’re coordinating with your spouse. Talk with your spouse about a plan that best benefits the two of you, in regard to your ages, incomes and health.

  • Should you file early?

    • If you are unsure whether you will live long enough to reach the general life expectancy age in America, which is around 78.6 years old, then you will want to file early. This way, you will still be able to reap the benefits for as long as you can.
    • If you are prone to medical issues, and you need an extra income to help cover these expenses, it may be in your best interest to file early.
    • Consider how much money you’re making at the moment. If you’re in need of the extra income, it may be wise to get your benefits earlier. Or, if you decide you want to invest the money, you will want to get the money earlier. It’s important to note that when you pull your Social Security benefits at 62, you will receive a 25% reduction in the number of benefits you will receive. That reduction will remain in place and the amount will not change.
    • Advantages for taking your filing for your benefits early include unlocking another family member’s benefits, like your spousal benefit. Your spouse cannot file until you file, and vice versa. You will also adopt a higher spousal benefit when your partner files, especially if the 50% of their benefits that he/she gets is higher than the 100% you get.
    • You will also have extra cash to spend early in your retirement years.

 

Collecting your Social Security benefits early just because you have the option to isn’t the smartest move you can make. Instead, you need to focus on why you may need to sign up early. If you’re in a position to sign up when you’re closer to 70, waiting may be in your best interest. This doesn’t mean that you should hold off on collecting your benefits, either. If there is a reason in which you need to receive your monthly payments at an earlier time, don’t hold off for the sake of getting higher payments.

If you are having trouble deciding whether it would be best to collect early, wait until you’re at full retirement age or when you’re 70, then you’ve come to the right place. The Best Senior Services is dedicated toward ensuring you know what’s in your best interest, and we prove it by setting you up with an agent who will work with you to help you better understand plans based on your specific needs. Visit our website to get started or call us at 855.979.8277!

How to Prepare Yourself for Medicare

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You’ve prepared yourself for many things throughout your life: your first day of work, your wedding, your first child. Now it’s time to prepare yourself for the next big thing, Medicare. Medicare is a confusing concept to immediately understand. It takes time before you feel confident enough to tackle what lies in it. If you’re unfamiliar with the program, Medicare is a health insurance program that is typically offered to Americans over the age of 65. It began in 1965 and has been offered throughout the United States since. As you prepare yourself for Medicare, there are a few things you will want to keep in mind to ensure that you better understand what the program is and how it could benefit you.

 

The benefits of being prepared

There are benefits for being enrolled for Medicare, but there are also benefits to preparing yourself for Medicare too. The first, and one of the obvious, benefits is that you’ll know what you’ll be getting yourself into. Going into Medicare enrollment without preparation will likely leave you confused and frustrated. By preparing, you’ll have information regarding your current health insurance plan, advice from a specialized agent and desired preferences in mind. No one knows your situation as well as you do, so planning for enrollment ahead of time will help you definitively settle on what you want.

Being prepared for Medicare will also benefit you because you’ll be able to enroll early. Like we stated before, open enrollment for Medicare begins three months before your 65th birthday and lasts until three months after you’ve turned 65. Preparing for Medicare early will allow you to enroll early.

Not to mention, preparing for Medicare will make things a lot easier. When you fill out the required information pertaining to enrollment, you’ll know your answers – or have them close – so you’re not scrambling to remember anything.

First thing’s first

Before you begin the process of preparing for Medicare, you first want to ensure that you are eligible. Medicare enrollment opens three months before you turn 65 and will be open for three months afterward. However, if you’re younger than 65, you can still qualify for Medicare if you have a permanent disability, end-stage renal disease, Lou Gehrig’s disease (also known as amyotrophic lateral sclerosis) or if you have been entitled to Social Security disability benefits for at least 24 months. These 24 months do not have to be consecutive.

Seek help from a Medicare specialist

Whether this is an insurance agent or broker, this specialist is familiar with the concept of Medicare and is ready to help you better understand what it entails. Seeking help from a specialist will not only relieve your confusion, but it could answer questions you don’t know you have.

Talk with a specialist about the potential benefits you will get out of Medicare, as well as some of the common misconceptions that go along with it, so that you have a better understanding of what you will be enrolling in.

This is where The Best Senior Services can help. The Best Senior Services specializes in providing seniors a licensed agent in their area that prioritizes their needs. Let TBSS connect you with a licensed representative by filling out some important information.

Research your options for Medicare

Meeting with a specialist is a great step in preparing yourself for Medicare. However, you shouldn’t only gather your information from your insurance agent or broker. It’s important you do your own research as well. The research you find could range from enrollment periods that work best for you or knowing what benefits you will get out of Medicare.

You’ll also want to do a deep dive into your current health insurance plan. Consider what coverage you currently have, and whether it will change once you turn 65. Knowing what you have now will help you fine-tune what you will need – or want – to have covered when you switch to Medicare.

It could even help to talk with others who have Medicare. There are large communities of people who are enrolled in the program and can offer great advice about things you are unsure about or want more information over.

Make sure your doctor accepts Medicare

Although millions of Americans over 65 use Medicare, that doesn’t guarantee your doctor will accept Medicare as your health insurance. Speak with your doctor to ensure that he or she accepts Medicare. If not, your agent will be able to provide you specific information about your plan.

Understand the important dates

Much like other insurance policies, Medicare isn’t flexible when it comes to dates. Perhaps the most important day to keep in mind with Medicare is October 15. This is when the Annual Open Enrollment Period begins, and it lasts until December 7. That is an eight-week timeframe in which you and your eligible loved ones can enroll for Medicare.

Take things one year at a time

We all get so used to planning our entire lives out that we forget we can break the planning process into smaller parts. A great way to mentally get ready for Medicare is to take things in smaller increments. As you continue with your research, you’ll find online resources that will help you plan for your first year in Medicare. This will help you plan all of the details in a manageable way, rather than overwhelm yourself with planning years in advance.

You can find your Year 1 Medicare checklist on medicare.gov, an enrollment checklist on healthline.com or articles with checklists for Medicare online.

 

Medicare isn’t the most exciting thing to be planning for, but it’s a good thing to be considering. It offers a full array of benefits and can be personalized to your preferences. When preparing for Medicare, remind yourself of the things that you need to do to successfully enroll. You should also keep in mind the things you have discovered about Medicare in your research – both online and with a specialist. Regardless, you’re on the right path to understanding what Medicare entails and how you can conquer it.

When to Trust What You’re Reading Online

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Do you remember when the internet was first created? As the internet slowly progressed, parents and guardians were quick to tell children not to believe everything they’ve read online. But we’ve now entered an era where almost everything takes place online, and it’s almost impossible to get through your daily life without needing it to some capacity — whether you want to have a video chat with your grandchildren, need to search for a recipe or even if you work from home. As a result, you don’t quite know when to trust what you’re reading and when you should listen to your instincts that you still can’t believe everything you read online.

This article is to help you know when you can trust what you’re reading on the internet, and how you can spot something fake.

What not to trust on the internet

Let’s get started with the resources that, generally, can’t be trusted. These are the websites in which anyone can put any sort of information into. This could lead to false information being posted as fact, which can be a dangerous thing. These resources are:

  • Social media. We could not emphasize this enough. Social media is an open forum for people to post whatever they want at whenever they want, however they want. And, unfortunately, people abuse this power. People use social media to post false or misleading claims that can’t be backed up. They may cite sources but doing so could reveal that the person misinterpreted the claim before posting about it or found information from another unreliable source. You should never blindly believe what you are reading on social media is true.
  • Wikipedia. Wikipedia labels itself as the “free encyclopedia” that posts general information over any topic — from celebrity biographies to a scientific phenomenon. Anyone with an account linked to Wikipedia can post material on any specific page. What anyone changes could be mistaken as fact to many people because he or she can change the information on the website, which can quickly become a problem. This could have an adverse effect because it could lead people to take actions based upon inaccurate details. Let’s say information about a popular schoolboard candidate was tampered with, resulting anyone who reads that false rumor to vote against him or her. The fake information spread about the candidate would result in a loss that was partially made unwarranted because of lies people perceived to be true.
  • Online reviews … kind of. Although online reviews can be very helpful, you need to be careful about them. Most of the time, people only write reviews if they are passionate enough to take the time out of their day. This can be a good thing and a bad thing. If there is an overwhelming number of reviews telling you that you should not purchase a product, then it’s likely that it is a product you will want to avoid. However, if there are mixed reviews, you will want to find a happy medium between the differing opinions you are seeing. A large reason why you should also be skeptical of online reviews is that, sometimes, companies will post false-positive reviews about their product or service. According to a report from BestSEOCompanies, almost 40% of these reviews are fake.

What to trust on the internet

Now, just because there are some places crawling with false information, it doesn’t mean that everything is fake. It is important to fact-check what you’re reading, and these are some of the resources that are viable and trustworthy:

  • Websites that are managed by the government. Pages ran by the United States government will typically end in .gov. Government-run websites are one of the most credible websites that circulate the internet because they are regularly fact-checked to ensure the information is still true. Many people rely on what is provided by government websites, so any details that are out-of-date are corrected. There are almost 2,000 websites overseen by the federal government, including the Library of Congress, Bureau of Economic Analysis, Census Bureau, and more.
  • Websites that are managed by academic institutions. Much like government-run sites, academic websites are also very credible. Most of the websites linked to academic institutions will end in .edu. Many times, these schools will post research papers about findings they have discovered, through intensive analysis and examination.
  • Google Scholar (and other scholarly databases). At Google Scholar, you will find a wide array for scholarly literature. According to the website, you will be able to find resources on articles, theses, books, abstracts, and court opinions. The website is an easy and efficient way to find credible resources for anything you would like to know more about. In fact, Google Scholar is a recommended tool to many college students who are writing papers or studying an independent subject.

 

What to do if you’re unsure

The highest recommendation that we can give is to fact-check. It’s good to get at least two to three sources that back up what you’re reading. Of course, you should not fact-check on social media. As we stated, social media is not a place to trust a lot of what you’re reading online.

When you are fact-checking, first make sure that the website cites any sources, whether it be cited links or a list of references. Check these sources to see whether they are based on legitimate data and research findings, or if they are false. You can typically tell if a resource is false based on the way it’s written. If the resource is written in broken English or is from a less-than-professional-looking website, it’s likely to be fake. However, if the reference is research posted by an academic institution, or if it is a registered with the government, it’s likely to be reliable.

Things to remember

It’s possible that you may feel overwhelmed by the amount of information that is circling around online. If there is one thing to know about the internet, it’s that it shows us just how much there is to learn out there. Although a lot of the information is misleading or altogether false, that doesn’t mean that there aren’t truthful things online.

If you’re researching into a topic, you will get a lot of mixed information that will display the varying opinions or findings over it. For example, insurance. If you are researching into insurance policies that will help you in retirement, you will find a lot of different facts and opinions about different policies. If you click on a link about health insurance from an insurance agency, you will find a lot of facts that will persuade you to want to work with it. But, if you click on a link from an independent broker, you may find points that you never considered and will deter you from selecting that policy or working with that company.

This can leave you feeling confused and, at times, stressed about the next steps you should take. Both aren’t necessarily wrong, but which option is better? Don’t worry, we’ve got you covered. The Best Senior Services is an educational hub for seniors to learn about what is their best option for insurance and other financial services in their retirement. We also connect seniors to a local registered agent who will work closely with them to give them the best plans for their future.

Call us today at 855.979.8277 or visit our website to get started with us today!