As I’m sure we have all learned by now, life is unpredictable. Life throws you curveballs, and sometimes those curveballs might affect your retirement plans. But, by staying ahead of the game and being prepared, you can help to secure your retirement plans no matter what life throws your way. Catching a retirement curveball starts with being aware of the different things that could throw your retirement off track and knowing how to manage them.
One thing that can shake up your retirement plan is job loss. This can impact your retirement accounts because you are no longer adding a portion of your steady income, and you lose the matching contributions that your employer was giving you. However, you can overcome this obstacle by setting aside more each month when you find a new job or possibly using some of your emergency funds to keep contributing to retirement through IRAs or taxable brokerage accounts.
Another major change in your life could be divorce. This leads to lots of financial implications including legal costs, loss of dual income and child support just to name a few. While all of this is going on, it’s sometimes hard to think about retirement savings. Try not to cash out on your retirement accounts early in order to help avoid additional taxes and potential penalties. If you are still married, or find yourself in a serious relationship after divorce, it’s important to plan for retirement with your significant other.
Emergencies like a fire, car accident or sudden illness can also push retirement savings to the back of your mind. If you aren’t prepared for them, you may think about cashing out your retirement funds to cover bills and expenses, however, like with divorce, this could mean added fees and potential lost income.
Something that most people may not consider as throwing off their retirement plans is having children. According to the US Department of Agriculture, raising a child from birth to age seventeen costs roughly $233,610. This could potentially throw your finances off track. Planning for a child should include planning financially by boosting your income, cutting back on expenses, or a combination of both. The important thing is not to put off retirement planning until the kids are out of the house.
Another retirement curveball you might need to be prepared for is caring for an older parent. This can also come with a lot of unexpected expenses, and helping your parents prepare early can ensure that they have sufficient funds to help cover their own expenses.
These are not the only retirement curveballs to look out for, as events like market crashes, buying a home and going back to school are also things to be aware of and plan for. You have to continue to keep an eye on your expenses and retirement budget. At O’Donnell Financial Group, we’ll work together to develop a solid plan to help you achieve your retirement goals, while also preparing you for whatever curveballs life throws at you. Let us help you catch a retirement curveball, and click here to schedule your complimentary financial review!
