5 Financial Hazards In Retirement

5 FINANCIAL HAZARDS

We live in a fast-paced, dynamic financial world. It explains why most retirees or pre-retirees find it challenging to relax about their future. If you want to secure your retirement years, you need to do some things right. Don’t just make plans, you also need to consider the factors and influences that can ruin your plans.  With proper strategizing, planning and implementation, you can navigate around impending financial roadblocks and anticipate an exciting retirement.

Here are 5 Top Financial Hazards:

Maintenance Planning and Retirement Income

Although a lot of people understand why they need Retirement Planning, but Retirement Maintenance goes hand in hand and should be considered as well. These are two sides of one hazard that is often overlooked and can be devastating.

The reason is simple; not all retirement plans work out as initially anticipated. There are factors like inflation that interrupt projections and increase expenses. That is why it makes sense to annually review your retirement income plan with a professional. We maintain our heating and cooling systems every year, change the oil in our car and rotate tires. Little things can make a big difference.  Reviewing and considering your retirement income plan is not a waste of time. 

Taxation and Wealth Transfer

Your wealth isn’t everything you make but what remains after you have paid your taxes. You probably already know that it is possible to activate retirement income plans that enable you to legitimately avoid some state and federal taxes.

All legacies are important regardless of their financial size. If passing along an attractive financial legacy to children, grandchildren, charities and other organizations is important to you, planning is needed. Are your funds in the most tax-advantaged vehicles? There are many effective and legal alternatives that can be used to reduce or eliminate these taxes. 

Financial Emergencies

This refers to issues that seem to arise out of nowhere. It may be a need for a car, roof or furnace. It could also be a casualty loss that isn’t covered on your auto insurance policy. Ask yourself, “Do I have access to enough liquid funds for such emergencies?”  The reason we call them emergencies is because they’re not things you would spend on ordinarily or regularly, but they may cost an arm and a leg when the expenses arise. Everyone seems to experience these; planning ahead is crucial.

Sickness

Sickness in this sense extends beyond occasional illnesses like the flu, colds, or an injury. It includes major illnesses that may incapacitate you permanently or for extended periods of time. 

When you’re still working, individual medical plans or group insurance can cushion the cost of your medical bills, including disability income insurance, and critical illness riders. 

However, your Medicare or Medicare supplement policy may not cover the unexpected cost of health care. There may also be need for nursing home or home health care needs due to a chronic illness. 

Death

 Death, especially, premature death is usually a strong concern for most of us.  Some have fear of living too long. Even though death is inevitable, we may fear it so much that we never deal with it and prepare for it.  Not leaving the issue of dying and our families well-being, to chance, will give them the support they’re going to need. By insuring that our death is not a financial burden to our loved ones, we leave behind the stuff we want to leave, helping them through the great emotional loss of our passing.

Conclusion

These financial and life hazards constitute the reasons you worry about your retirement years – some in foresight (expected inflation) and some not “in” our sights (emergencies, the unforeseen). Planning against these hazards can mark the difference between a tranquil retirement and a worrisome one. Play it safe: plan! It pays better than wishing you had done things differently. Contact us for a complementary review to discuss what makes sense for you.

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