5 Surprises to Watch Out for in Retirement

Asset Protection Group | May 9, 2022

Our goal is always to help clients establish reliable, long-term streams of income that will hopefully last throughout their retirement years. But sometimes fate has other plans. While you can’t control every economic or cultural factor that can alter your retirement plan, anticipating these potential surprises can help you to minimize their impact.

Stock market woes. Temporary swings in the stock market can put a dent in retirement savings. For example, the 2008 crash cost US retirement accounts about 2.7 trillion dollars. Ouch! Obviously, we hope for a rebound when these situations occur, but in the meantime the effects can feel disastrous.

Health insurance premiums. Some of you might hope (or need) to retire before the age of Medicare eligibility (65). So what would you do about health insurance in the meantime? The average cost of an Affordable Care Act silver policy currently tops $1,000 dollars a month. Health insurance is one of the primary reasons many workers wait until after age 65 to retire.

Long-term nursing care. According to the Department of Health and Human services, anyone turning 65 today stands a 70 percent chance of needing long-term nursing care at some point in the future. And yes, that’s true even if you’re healthy. And around 20 percent of seniors will need long-term care for five years or more. Costs can range from around $48,000 (for assisted living facilities) to over $100,000 annually (for a private room in a nursing home). For most of us, the cost of long-term care would significantly impact our budgets.

Caring for a family member. Some of you might prefer to care for a spouse or other aging family member yourselves, rather than resorting to long-term nursing care. But that will mean time off of work, the cost of special equipment, the cost of modifications to your home, and the cost of backup care.

Adult children. In the last year, one in nine Baby Boomer parents experienced an adult child moving back into the family home due to their own financial crisis. And in many cases, that means impact on the retiree’s budget.

When we meet to discuss your retirement plan, let’s discuss the potential impact of events like the ones listed above. While we can’t always accurately predict everything life throws our way, we can all hope for the best while preparing for unpleasant surprises and setbacks.

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