The stock market hasn’t been a pretty place to have money so far in 2016.
Especially if it is your life savings, money you are using to pay for food, housing, medicine and more.
What you need to live, in other words.
Then it can be a downright scary situation right now, the way it is for too many seniors.
Is your senior loved one among them? Would you know?
Life Changing Market Drop
“My husband has Alzheimer’s and is in a memory care facility that we are paying for out of savings. With the market drop, though, we can’t afford his care so he will have to come home but there is no way I can give him the care he needs.”
Unfortunately, that is a real story – and not an isolated situation.
Many of our parents and grandparents are seeing their lives by the global stock market plunge that greeted the new year.
Often seniors don’t want to be a burden to family members or are too proud to reach out for help.
Without help, what will they do to bridge the gap between what they need and what they can afford?
Savings for Senior Years at Risk
The widespread demise of the traditional pension plan has left many of all ages depending on what they have saved over their employment years to supplement Social Security benefits.
Traditional pensions have been replaced by, depending on the type of employer, 401k, 403b, 457, and Thrift Savings Plans. Instead of those, or maybe in addition, some of us have Individual Retirement Accounts (IRAs).
Regardless of the name, it means the retirement savings many have doesn’t enjoy anywhere near the certainty of those traditional pensions.
It also means, depending on options chosen, the money upon which many are counting to fund elder years is at the mercy of the stock and bond markets.
What’s Going Wrong
The message has long been out to seniors and those approaching retirement age that the stock market might not be the best place for money needed for day to day expenses.
“Don’t put any money into stocks you aren’t able to lose” is wise, if blunt, advice.
That lesson was learned the hard way by millions of all ages when crumbling financial markets led to this millennium’s Great Recession.
Did the lesson not take or was it quickly forgotten?
Keep in mind the general wisdom may not have fit your senior’s situation. Generalizations are no substitute for personalized recommendations.
We have heard a number of reasons individual seniors have put renewed reliance on stock investments, despite the risks.
- Having to make up for lost ground after the last big stock market drop
- Counting on a growing nest egg to meet future needs, which was not going to happen with near-zero interest rates of savings
- Did not save enough while working, for many reasons, and need more retirement savings to supplement Social Security
- Facing more expenses, especially healthcare and living costs, than anticipated and need more income
Whether due to one of those reasons or others, many seniors have a lot of their money exposed to stock market fluctuations and paid a price in the early days of 2016.
Are Your Senior Loved Ones Feeling New Financial Strain?
Do you know if your senior loved ones are facing financial strain due to the market drop or any other reason?
Have you asked them?
Do you feel you can discuss it with them?
Finances are an awkward topic for many to raise with parents or grandparents, especially when money was never the subject of family discussions.
It may take observing and listening to determine if loved ones are having money problems.
- Do they resist going places, such as movies or shopping, where they would spend money and had done enthusiastically in the past?
- Are their eating habits changing, such as eating out less or buying less expensive (or just plain less) food?
- Is the thermostat in their home set to less comfortable temperatures than they typically use?
You get the idea . . . are they saying or doing anything to indicate money is tighter, or worse?
What Family Caregivers Can Do
We can’t tell you what to do if your senior loved ones’ financial resources are falling short of needs. That’s a personal situation for you and your family.
If they aren’t making ends meet, though, you might determine if they are availing themselves of benefits available to them, as we discussed in this article.
Whether or not seniors are feeling pain from the current market situation, it may be wise to ensure they have the information and/or advice they need to manage their investments in a manner consistent with their financial objectives.
Would consulting with a qualified financial adviser provide them answers they need and advice they would feel confident following?
Is there research you could do with them that would provide the information they need? The web, after all, is full of resources. Not all provide sound advice and some may be harmful, so stick to sources in which you have confidence.
After all, while money may not buy happiness it pays for a lot of the things our senior loved ones need to be healthy and safe.