Clients sometimes ask me what they are not thinking about when it comes to retirement planning. Mostly, they’ve thought about a lot, but there are a few things that can surprise you.
Unreimbursed medical expenses.
Yes, retirees dread health care costs, but it seems like kind of an amorphous worry, not one that gets planned for. Working with a knowledgeable Medigap insurance broker can help you find the right extra coverage for your current health situation. If things get better or worse, there is always open enrollment at year-end to move to a plan that is better for you. Also, don’t forget, dental work, glasses, and hearing aids are not covered by Medicare, so have some money set aside for those things every year.
Unemployed/divorcing/generally mooching kids (or parents).
Ever heard the expression, “the chain is only as strong as its weakest link?” Unfortunately, your finances are only as strong as your weakest family member’s. Unless you put boundaries in place and stick to them. Working with a financial adviser can help you determine a monthly amount you can afford to give family members without derailing your own financial security. Find that number and stick to it. Remember, you can’t help anyone financially if you are sinking yourself.
Your own divorce.
Hey, I’m not encouraging anyone to stay in an unhappy marriage for the sake of money. But, be realistic on the effect divorce will have on your finances. Splitting one household into two generally means a change in lifestyle for both parties. Get ready to scrutinize your spending and make some adjustments. Also, be very careful that you are splitting assets and incomes in a fair way. That doesn’t at all mean 50%/50% due to taxes, pension rules, etc. Utilize the services of a Certified Divorce Financial Analyst for a better, more fair financial outcome.
Yes, retirement can have some boogey-man-like financial surprises. But hey, that’s life in general. When did you ever have a year go by without surprise costs on your house, medical bills, or other curveballs? As before, your unexpected expenses can be managed by living under your means and setting aside money for emergencies – just like before you were retired.