Retirement is an era associated with relaxing, spending time with family, and doing what you enjoy. However, it’s not always smooth sailing. Retirees often face a variety of challenges and speed bumps. Some of the big ones including emergency events, market volatility, and longevity. Start preparing now for these challenges so your retirement can be as stress-free and enjoyable as possible.
Emergency events. Life continues to happen when you are retired, and emergencies can arise. A spouse can pass way or become very ill. A child can have a medical emergency. A natural disaster can damage your home. As unpleasant as it is to think about some of the events, it’s important to plan for these events before they happen—heaven forbid. It’s easier to have the hard conversations now.
One of the best ways you can prepare is by creating emergency funds. Saving for emergencies is hopefully a habit you’ve already developed before retirement. It’s still important now.
Ensure that you have an estate plan and your beneficiaries know about it. Have plans for unexpected deaths, illnesses, or disabilities. As the years go by, update your financial plans as needed. Being proactive makes it much easier to deal with emergencies when they arise.
Market Volatility. I’m sure most retirees—and perhaps most people in general—would love to have a crystal ball to predict how the market will change in the coming years. Of course, we want it to continue to grow. However, we know that the market is volatile. Financial challenges in the economy can cause shifts as well as events we can’t predict—like natural disasters.
Prepare now for potential downturns so you can continue living a comfortable retirement regardless of dramatic shifts in the markets. A financial planner can give you advice on how to best protect your portfolio and assets.
Longevity. This likely comes as no surprise—Americans’ life expectancy is very high. While this can be great, there are also challenges. For example, as we age, medical problems (and expenses) can increase.
Additionally, some retirees may worry they could outlive their retirement savings. Even if you have a robust nest egg, this is still something important to consider. After retirement, some people continue to spend the same as they did when they were working. When you aren’t making the same income, this can deplete your resources faster than you may expect. It’s great to spend money on trips or large purchases that you have planned for, but keep in mind how long you will need your wealth to last. Spend wisely. A financial planner will guide you to make educated decisions.
Your retirement years can be some of the best ones of your life. But beware of potential speed bumps. Prepare now and you can have the relaxing retirement you’ve been preparing for.