The Bible is full of advice about money and wealth, and it tends to boil down to two major messages. First, God wants his children to be good stewards of all the things he has given them, including money. Second, those who have riches or any other type of blessing should consider how to serve others with some of those blessings.
The call to good stewardship is not one that is limited by age, so it's important for people of all ages to learn how to manage their finances well and do good things with their money — for themselves and for others. It may also be important to know how to protect and even grow your money, no matter what age you are — especially at times when necessities, such as food and fuel, are increasing in price.
At Bethesda Senior Living Communities, we work hard to ensure every resident across our many independent and assisted living communities can live a vibrant lifestyle. That includes making a variety of services available to ensure residents have options for managing their own health and wellness, social lives and schedules and homes. And while we aren't financial advisors and certainly don't manage resident financial accounts, we've done a bit of work to pull in some top tips for older adults who are interested in investing.
The older someone is, the more they should pay attention to the risk associated with any investment. This is because there isn't as much time to recover from a loss, so a risky investment that doesn't pan out can be more detrimental to an older adult than a younger person with more time to save.
One of the safest ways to invest is to do so in an FDIC-insured account such as a high-yield savings account or CDs and MMDAs with a bank or credit union. These accounts are insured for up to $250,000 in many cases, although you should always check with your bank to understand the insurance amounts.
The downside of these types of accounts is that they don't tend to generate a lot of income. Low-risk investments are typically low-yield, which means they help you grow wealth a little bit at a time.
Most older adults have heard of annuities, and they're often listed as a great investment for seniors. But annuities are complex and come in many types, so it can be difficult to know which one might be right for you. There are also a number of budget and financial implications related to annuities, so you may want to work with a professional, such as a financial advisor, if you're looking into annuities.
This is actually a good tip in general, as financial advisors can help older adults decide on appropriate financial goals, set up budgets and manage investment options to match those needs.
Real estate may be an ideal investment for older adults, depending on their resources and the level of interaction they want with their investments. For example, if you no longer want to live in your current home and love the idea of the all-inclusive and active life found in an independent living community, you might consider renting your house instead of selling it. Obviously, this decision depends on a variety of factors, such as whether you have the resources and ability to keep up with landlord duties. In some cases, older adults pay property management firms to handle this type of work for them.
Some older adults buy other properties and rent them, using rents as a way to drive regular income. But you can also consider something called a Real Estate Investment Trust, or REIT. These are investment vehicles that let you benefit from the performance of the real estate market without actually owning real estate.
As you look to invest and steward your money as an older adult, be aware that not everyone who says they want to help you do that is legitimate. Unfortunately, there are scammers who seek specifically to take advantage of older adults. Asking questions, only working with well-known banks and financial companies and educating yourself about financial fraud are good ways to stay safe as you invest. The Securities and Exchange Commission has published a Guide for Seniors about fraud and scams that might be a good place to start.
Proverbs 13:11 says, "Wealth gained hastily will dwindle, but whoever gathers little by little will increase it."
Get-rich-quick schemes or high-risk investments aren't typically great choices for older adults. But making good financial choices each day can help you make the most of all your resources. Whether that's moving into an assisted living community to get everything you need for one price, saving with coupons at the grocery store or looking into a CD investment to increase your retirement funds, taking time to consider your decisions carefully is always a good idea.