Whether you are a teenager or an elderly person, there is a lot of financial education that you should learn. The more you know, the better prepared you will be to make wise financial decisions. You may not know that you can participate in the Stock market or even get an insurance policy, but there are a lot of ways to do this. You just need to know what to look for.
Having basic financial education can go a long way towards helping older adults maintain their independence and remain healthy. However, many older adults lack the knowledge and resources needed to make the most of their retirement and medical benefits. It’s a complex system that can be overwhelming.
Financial literacy is a broad term that describes the capacity to understand and use financial information. It is important for all Americans to be able to make sound financial decisions. This includes navigating the healthcare system and knowing when to claim Social Security benefits.
Older adults have more medical expenses than younger adults and are more likely to consume more services. It is important for families to know how to manage their loved ones’ finances as they age.
A universal healthcare system, such as Medicare, is available for older Americans. However, it can be confusing to know which Medicare plan to choose and how much out-of-pocket costs will be involved. Medicare’s Part D plans restrict prescription drug coverage.
Credit card repayment
Among the senior population, credit card repayment is a major concern. According to the National Council on Aging, credit card debt accounted for 26 percent of the financial stress faced by households headed by individuals 75 and older in 2016. It’s a problem for senior citizens on a fixed income, too.
One reason for the increased use of credit cards among senior citizens is that more senior citizens are experiencing unexpected costs in retirement. Using a credit card for these purchases is a common way to manage these costs.
But using a credit card without significant savings can lead to overspending. It’s also a problem for people who have limited discretionary income. If you don’t have the money for a large purchase, you may be forced to resort to borrowing money from a family member. In addition, a revolving debt can lead to ongoing costs for medical expenses.
It’s also a problem for retirees on a fixed income. In fact, one in five single adults and 21 percent of married couples rely on Social Security for 90 percent or more of their income.
Stock market participation
Various studies have been conducted to understand the impact of stock market participation on financial education for seniors. Some of the studies have focused on financial literacy and some on behavioral attitudes. These studies have shown that knowledge can affect financial behavior.
Another study has compared risk attitudes to stock market participation. It was found that individuals with higher risk attitudes tend to invest in stocks more often. Risk-averse investors tend to invest in bonds. The literature also reveals that investors who have been tempted by big returns have lost money.
A study has also been conducted on the influence of financial self-efficacy on stock market participation. Specifically, individuals with greater financial self-efficacy hold the impression that they can control their financial circumstances over the long run. Hence, they can make sound financial decisions.
The literature also suggests that higher levels of financial knowledge can increase stock market participation. However, these levels do not constitute enough knowledge to develop financial capabilities. In fact, it is necessary to combine knowledge with attitudes in order to develop sound financial decisions.
Scams that target older people
During the holiday season, seniors become a prime target for scams. The scams usually go unreported because they are considered a low-risk crime. However, these scams can be devastating to older adults. They may result in the loss of thousands of dollars and leave them with limited ways to recover their losses.
One of the most common scams is the grandparent scam. A scammer will call an older adult pretending to be their grandchild, claiming there is an emergency situation and they need money immediately. They will ask for money directly, or through an app or gift card. They may ask for personal information, and may use the information to commit identity theft.
The fraudster may use social networking sites to contact an older adult. They may pose as a relative or a stranger. They may ask the victim to provide personal information, such as a social security number or credit card number. They may also pressure the victim not to report the scam to their family.