Try Not to Slip

Dennis Friedman

THE FLU SEASON WAS approaching, so I decided to schedule an appointment with my medical provider for a flu shot. The next morning, I received an email from my prescription drug plan informing me that it was processing a payment for $30.80.

My immediate thought: “How could my medical provider charge me for a flu shot that I haven’t yet received? And why aren’t they billing Medicare?” Medicare provides a free flu shot to every enrollee.

I called my doctor’s office to find out what was going on. I explained to the billing department that I had been erroneously charged $30.80. I told the representative that I don’t take medication and the only explanation for the charge had to be the flu shot that I hadn’t received yet.

The representative said that couldn’t possibly be true, because the office doesn’t bill my prescription drug plan. We went back and forth for a while, until he suggested that I call my drug plan to find out what the charge was for. I said, “I know it’s for the flu shot and I’ll be calling you back to get to the bottom of this.”

I grudgingly called my insurance plan. While a representative there had me on hold, I decided to look again at the email I’d received. As I glanced at the message, I noticed in blue letters the words: “Premium payment of $30.80.”

Yes, it was my mistake. I didn’t take the time to read the email carefully, and instead got emotional and jumped to conclusions. I usually don’t receive premium payment notifications from my prescription drug plan, but that didn’t excuse my behavior.

The next day, AT&T was coming to my house to service my wi-fi. I recently had my house remodeled and I believed the workers might have broken something during the renovation. I kept telling them that they needed to be more careful with our belongings.

When I reconnected the wi-fi, I couldn’t get access to the internet. I suspected the workers either damaged the modem or the wiring in my house. What else could it be? It was working perfectly before they showed up.

When the service repairman arrived, he bent down, looked at the modem and said, “Oh, I see your problem. You have the wires on the modem reversed. They’re connected to the wrong ports.”

Yes, it was my mistake. I didn’t pay close attention to what I was doing when I reconnected the modem. I was so sure it was someone else’s fault.

I like to think neither of those mistakes would have happened in earlier years. As I’ve grown older, I’ve become more impatient, emotional and overconfident in what I’m doing. I also sometimes don’t see the obvious.

Those are not attributes you want when managing money. According to a New York Times article, “Studies show that the ability to perform simple math problems, as well as handling financial matters, are typically one of the first set of skills to decline in diseases of the mind.” On top of that, many seniors—who appear to have the wherewithal cognitively—may no longer have the ability to fully understand financial matters, increasing the chances of financial mistakes.

The upshot: I’m not saying the two episodes I’ve described above indicate I can’t manage my money and need help. But they are warning signs that tell me I need to be more careful as I age. What should I and others do? Here are eight pointers for how the elderly can better manage and protect their money:

  1. Look after your brain. Research has shown that having a healthy lifestyle has a positive effect on the life of the brain. Exercising, eating healthy foods and getting plenty of sleep can improve your cognitive skills.
  2. Seek help. Hire a fee-only financial advisor to manage your investments. This could protect you from devastating financial mistakes. You might also seek advice from trusted family members on important money matters.
  3. Simplify your finances. Invest in a target-date retirement fund or a few broad market index funds that require little maintenance.
  4. Buy an annuity. You can protect part of your money from investment mistakes by purchasing an immediate fixed annuity. You make an upfront payment to an insurance company and, in return, you can receive monthly income for life.
  5. Don’t use cash. Instead, use credit cards and checks, which will create a paper trail for all your major financial transactions.
  6. Automate your finances. Many seniors have dexterity problems and poor eyesight that can make performing transactions difficult. Set up direct deposits, automatic transfers and automatic bill payments to help eliminate financial errors.
  7. Draw up advanced directives. Have in place powers of attorney for your finances and health care. These will allow someone to oversee your affairs if you become incapacitated.
  8. Guard against telephone scammers. How? Don’t answer the phone unless you recognize the number. Register your phone number with the National Do Not Call Registry. Use apps that block robocalls.

Dennis Friedman retired from Boeing Satellite Systems after a 30-year career in manufacturing. Born in Ohio, Dennis is a California transplant with a bachelor’s degree in history and an MBA. A self-described “humble investor,” he likes reading historical novels and about personal finance. His previous articles include Go LongThe Short Game and It Sure Adds Up. Follow Dennis on Twitter @DMFrie.

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