Retirement is seen as an extremely peaceful and happy time. You’re done working and living the life, what could go wrong? The answer is simple: lots. Threats to your retirement savings can rear their ugly heads seemingly out of nowhere and you need to be prepared for anything. Here are 4 major threats to your storybook retirement that you need to prepare for.
1. Caring For Elderly Parents
Now this is one that can escape most people in their 20’s as most of their parents are still either working or are able-bodied early retirees. But fast forward a little while and there is no telling what sort of state your parents may be in. And whether it is putting them into a retirement home or caring for them yourself, it can take a lot of time and/or money. Now, not all elderly parents require specific and constant care, but you should definitely keep that prospective in mind and plan for it as you just never know what could happen.
2. Medical Emergencies
If you were unfamiliar, unexpected medical emergencies are actually the leading cause of bankruptcy in the USA. This is simply because most people employ the mindset of “oh, but it won’t happen to me”. But, fact is, it very well could and you need to be prepared for it. Whether that preparation be having good healthcare or keeping a lot of savings in case on emergency, this is something that absolutely needs to be covered. If you don’t have some measure present in case something goes horribly wrong, you can kiss those hard earned retirement savings goodbye!
3. Boomerang Children
While this may not directly relate to people in their 20s and 30s right now, but if you plan on having children, chances are you will deal with boomerang children at one time or another. Boomerang children are essentially children that are grown up and have moved out, only to return due to a variety of potential reasons such as unemployment or financial struggles. As you could imagine, this can be an extremely expensive endeavor, especially if it isn’t planned for.
4. Not Saving Enough/Outliving Your Money
Now this one just simply stems from laziness, but still occurs quite often these days. Either individuals will simply not save enough and think “this will be good enough” or only save enough to live to a certain age. Fact is, nobody knows how old they will live to or exactly how much they will need. In this case, having more money saved than you need is infinitely better than not having enough. Budgeting and planning can be a good way to make sure you don’t fall victim to this threat, but budgeting is only effective if you keep at it.