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Preparing For Retirement

retire

We all like to fall into a routine when it comes to making monthly payments and purchases. The ability to stick to a budget is important in retirement, but there may be surprise expenses you might not have considered.

For example, appliances like a washer and dryer never come to mind until the day they need to be replaced. As nice as it would be, washers and dryers aren’t built to last 40 or 50 years, and when the time comes to buy a replacement, you might be surprised just how expensive they are these days.

While many retirees find they can live comfortably on a fixed budget, finances can be adversely impacted when a bunch of unexpected expenses pop up in rapid succession. This can be especially disconcerting when it happens after regular paychecks have stopped.

A study by the Society of Actuaries found that over a 15-year timespan, nearly one out of five retirees experienced up to four unexpected big-ticket expenses. These included things like home damage due to fire or a natural disaster, loss of savings to a scam or poor investment, funeral expenses of a loved one, a medical emergency or dental expense, the need for paid in-home care due to an illness or disability, a major home repair and even divorce.

When pre-retirees sit down with a financial professional to develop or update a retirement income strategy, they should also consider establishing a rainy day fund for unexpected expenses.

Source: AE Marketing Hub