September is Disaster Preparedness Month, which encourages Americans to take steps to prepare for emergencies in their homes, businesses, schools, and communities. This year’s theme, “Preparing for Older Adults,” underscores the need for specialized planning, especially for those in communities disproportionally impacted by all-hazard events. While older adults may face unique financial and accounting challenges, they can navigate natural disasters with increased confidence and security with the proper preparation. Here’s a roadmap to fortify the financial foundations of our seniors:
- Simplify and Safeguard Document Accessibility: Over time, the accumulation of personal and financial documents can hinder prompt access, especially during emergencies. It’s essential not only to have these records at your fingertips but also to ensure their continued safety in the face of disaster. For quick access and safety, consider these steps before a disaster strikes:
- Organize and safeguard critical documents such as household IDs, wills, deeds, tax records, bank details, insurance policies, and personal IDs like passports and birth certificates.
- Go digital: Alongside your hard copies, maintain digital backups on cloud services or secure drives for added safety and easier access in emergencies.
- Prepare a Disaster-Ready Budget: Natural disasters bring unforeseen costs. For older adults on fixed incomes, planning an emergency budget ahead of time is essential. To prepare:
- Plan for Costs: Think about possible expenses like temporary housing, medical care, and transportation.
- Save Regularly: Even small savings can grow over time, offering a financial safety net during emergencies.
- Have cash ready, as ATMs and card machines might not work during disasters.
- Regularly Review Insurance: Regular audits and updates of insurance policies are crucial.
- Make sure your coverage is thorough and covers local risks like floods, hurricanes, or wildfires.
- Familiarize yourself with the claims process. Knowing the steps helps speed up resolutions during tough times, ensuring timely support.
- Stay a Step Ahead of Tax Relief: After many disasters, the IRS and many state agencies often extend a supportive hand through tax relief initiatives. Stay abreast of these and uphold a meticulous asset record. Such groundwork aids in insurance claims and taps into tax deductions for any compromised property.
- Protect Your Retirement Savings: While it might be tempting to dip into retirement savings during emergencies, it’s important to understand the long-term implications:
- Be aware of the tax consequences of early withdrawals, which can lead to penalties and extra taxes, including a potential 10% penalty.
- Consider other financial options like disaster grants or community aid before tapping into retirement funds.
- Consult with a financial advisor, as periodic financial check-ins ensure assets, including your retirement savings, remain shielded and optimized.
- Stay Informed and Connect Locally: Many high-risk areas have community support systems that residents might be unaware of. To benefit fully:
- Stay Alert to Scams: In the wake of disasters, older adults often become prime targets for financial scam artists looking to exploit the chaos. These con artists may offer fake aid or pose as officials to steal money or personal information. Older adults should always remain vigilant by diligently vetting the authenticity of offers, be wary of unsolicited outreach, and protect their personal and financial data.
Preparing financially for disasters as an older adult calls for careful planning and foresight. In an ever-changing world, having the right strategies is critical. Whether in moments of calm or turmoil, your CRI advisor is ready to stand by your side, providing the expertise and guidance to bolster your financial resilience through challenging times.