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Palo Alto Online

Managing your gold in the golden years

by Nisha Ramachandran

Growing up during the Great Depression, Palo Alto resident Eliot Bolter learned to be conservative with his money. When he bought a car, he would drive it till it died. When he and his wife bought their Palo Alto house, they scrimped and saved until they could pay off the entire mortgage four years later.

When he retired, he took this Depression-era mentality to heart.

"We have to be careful and minimize expenses," he said. Despite a lifetime of watching his pennies, Bolter sometimes stays awake at night wondering what he should be doing.

For many seniors like Bolter, money is a source of constant concern. Without a job to provide income, these individuals are often left to rely on Social Security or their own devices.

According to a report by the AARP, more than 70 percent of older workers close to retirement (age 55 and above) have some type of retirement plan. However, a "sizeable portion" of this group lacks other assistance besides Social Security or other savings for their retirement income, the report said.

Although the key to easing the monetary burden of retirement is to plan early, don't worry if you haven't.

"It is never too late to make a better future," said Peter Evans, who teaches a financial strategies class in Palo Alto. The biggest challenge is often sitting down and taking a look at financial records. "People are afraid to get bad news that they should have done this or that, and they keep putting it off."

Evans recommended that all individuals, regardless of their age and financial status, start this process by making a list of goals for the future.

"If you don't know what you want to do, it's going to be impossible to get there," he said. So if it's a month in Paris, paying for a grandchild's college education or just making the rent, these should be included in a long-term plan.

One way to figure out how much these goals will cost is to use a financial calculator. Instruments like these can help calculate the amount of money available and the amount of money needed. A good example of a financial calculator can be found online on the AARP Web site, www.aarp.org.

Another way to plan for financial security is to go through a more detailed question and answer session with a financial planner or through a class. These questions should cover in-depth financial topics to help determine asset allocation, such as what percentage of your money should be invested in growth versus more fixed income items such as bonds.

A session should also help a person understand and manage the risk involved when it comes to making investments.

"With the financial downturn over the last few years, there were quite a few individuals who have seen a drop in their investments because they didn't understand the risks," Evans said.

Besides planning for the long-term, the day-to-day management of one's money can also be overwhelming. Tari Vickery, a Palo Alto financial consultant, said many of her elderly clients find it difficult to keep track of all their paper work.

"The common thread is that they get to the point where they can't find what they are looking for," she said. "Either they think 'I can't cope with what's inside this envelope' or 'it's not important.' "

For one client, this meant ignoring requests from the Internal Revenue Service to file her taxes because she thought her accountant automatically filled out the forms. Vickery worked with the client to pull together the necessary paperwork for her accountant to fill out the forms.

Simple steps can help solve these organizational problems. For example, Vickery helps her clients dig through piles of paper and establish color-coded filing systems to keep track of bills.

"It helps them compartmentalize," she said. Vickery also encourages clients to use the computer, pay bills online and set up spreadsheets to track daily expenditures and appointments.

The most important thing in creating a system, however, "is being flexible. Different things work for different people," Vickery said.

If hiring a financial planner is prohibitively expensive (Vickery's services cost $100 an hour) there are plenty of inexpensive alternatives to help senior citizens cope with money problems. Senior centers like Avenidas offer free tax assistance as well as counseling to help determine a more individual course of action. Other places, such as the Health Resource Center at El Camino Hospital, can help seniors fill out Medicare and insurance claims.

For all the financial planning and tips, Bolter holds to a simpler principle for successful retirement.

"Don't just blow all [your money] because there will be a day when you regret it," he said.

Who to call

For help managing money, contact the following organizations: *Avenidas: (650) 326-5362, www.avenidas.org *Health Resources Center, El Camino Hospital (for Medicare and other insurance claims): (650) 988-7622; carla_paul@elcaminohospital.org *Menlo Park Senior Center (for tax assistance): (650) 322-4578 *Mountain View Senior Center: (650) 326-6330 *Peninsula Volunteers Little House: (650) 326-2025 or (650) 851-8959, www.penvol.org/littlehouse/ *Peter Evans: (650) 227-0333, www.planwithpeter.com *Tari Vickery: (650) 462-9359, tbvickery@yahoo.com