Senior citizens stashing cash in their homes, is a bad idea — say experts.
The statistics compiled by Edelman Intelligence are astounding. Ten percent of older Americans report hiding cash in places around the house, including under their mattresses. But experts say treating your house like a savings account isn’t doing you — or your money — any favors.
Stashing Cash: What Are Seniors Thinking?
The Edelman survey polled 6,000 U.S. seniors, aged 55+ and found that 10 percent stashed their cash at home. Seventy-two percent were “constant savers” who put money aside on a regular basis, not just to meet a short-term goal.
One reason given for holding monies at home is that many seniors have gone through tough financial times they’re afraid it will happen again.
Therefore, by keeping money at home, it makes them feel more comfortable. However, the downside is that it also makes them vulnerable to loss from theft, fires, floods and accidents. Moreover, seniors living at home may become susceptible to memory failure or other health challenges and forget the locations.
Experts recommend that seniors keep a modest amount of cash at home. For example, no more than $1,000, or the maximum covered by their insurance policy at home in a known and secure location.
The American Red Cross and other disaster-preparedness organizations also recommend keeping a small sum packed in your home’s emergency kit for immediate needs, like gas money, in case of a natural disaster.
Furthermore, seniors should maintain a true-emergency fund that can keep them going for 3-6 months. That best place to park this money is a bank savings account — many banks are paying 2 percent interest.
Choose a bank that protects and insures deposits via the Federal Deposit Insurance Corp. You can sleep well at night, too.
Between the spending cash at home plus the insured local bank account, seniors can get by comfortably. Additional monies can be put into investments that will make the money grow safely.