(3 Minute Read)
Many seniors living on a fixed income face a general fear of spending money outside of their allotted expenses. Setting budgets often mean that finances go first toward bills and mandatory expenses, leaving the rest to either keep for a safety net or put towards fun. Most seniors choose to exhibit ‘spendaphobia,’ a term used to describe the fear of spending money, and keep the leftover funds in a savings account.
A Reluctance to Spend
Fixed incomes leave little room to build savings, especially if those incomes are being used entirely each month. This common situation is what drives many retirees into spendaphobia. With rising medical costs looming over retirees, it’s easy to feel afraid to spend money on non-essential items. However, that spendaphobia might mean putting off the very things people look forward to in their retirements. If you view the things you’ve always wanted to do in your retirement as essential, then you can make a shift in your mindset when determining how much to save and when you can loosen up a little bit.
Funding Retirement Adventures
Not every adventure involves traveling or exploring new places. Adventures can simply mean beginning a new hobby, picking up a new skill, or even exploring new low-key work options that have always interested you. The additional time awarded to retirees is a lot to handle, especially if you’re not spending that time doing things you love. Many seniors get part time jobs to help pass the time and feel like they’re still contributing to society in some way. However, we feel this should never have to be done in order to fully enjoy your retirement and be financially stable. Instead, you should consider putting any underused assets to work for you now. Assets can include any unused or no longer needed jewelry, cars, property, and even life insurance policies. Review your assets and consider how selling them can benefit your overall retirement funds, allowing you to get rid of any fears to spend money.
Many seniors utilize life settlements—the sale of a life insurance policy that is no longer needed or wanted—to acquire a large sum of money immediately. Through a life settlement, you may be able to sell your policy for an amount exponentially greater than the policy’s surrender value.
If you’re interested in how a life settlement can increase your quality of life in retirement, please check out our website to learn more!
Case Study:
Bill just turned 80 and his $500k life insurance policy has become a burden to pay. The premiums have been increasing for several years. Bill bought the life insurance to fund his 4 children’s college education in case of the unexpected. Bill was planning on letting his policy lapse but his wife wanted him to keep some insurance. Bill discovered he could sell a portion of his policy. Bill sold $400k of his policy for $68,000 in cash and kept $100k of death benefit for his wife.
