Wealth Strategies: Planning for unexpected retirement costs

Planning for unexpected retirement costs

When planning in advance for retirement, one must certainly review and differentiate between wants and needs, and prioritize these items accordingly.  Such considerations generally include various details such as income, savings, inflation, pensions, downsizing, estate planning, and desired lifestyle.  One can, however, run into a number of unplanned costs and changes that hadn’t been considered in advance.

One of the foremost concerns that are worthwhile to review would include healthcare costs, which can easily be underestimated, and come into play along with unforeseen health circumstances.  Compounding this is the cost of long-term care insurance which can be rather onerous, and should be addressed prior to retirement.  Another example of such unforeseen expenses may be those that are currently covered by an employer while one is fully employed, but may no longer be covered in retirement.  Tax levied on retirement savings is also of a concern, as we are taxed at our top marginal rate for registered account income (although planning can be done in advance that will mitigate this).  And lastly, a surviving spouse may encounter loss of, or reduction in, income whereby certain government benefits and pensions may not continue at all or not at the prior level once one of the partners has passed away.

As is the case with most things in life, it’s far easier to attain our goals, and we find that there are fewer challenges along the way, if we have a solid plan.  Your financial advisor is therefore instrumental in addressing the above retirement concerns as one initially plans for, approaches, and enters into retirement.

For additional information, please view this third-party article.  Please note that this article was originally intended for a U.S. audience.  An IRA, as referenced in the article, is comparable to a RRSP here in Canada, Medicare is the U.S. equivalent of our provincial health care, and Social Security is akin to our CPP and Old Age Security (OAS).