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5 Unexpected Threats To Your Retirement Plan

5 Unexpected Threats To Your Retirement Plan

| August 02, 2019
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You’ve been saving and planning for years, each day inching a little bit closer to retirement. The plan you developed with your financial advisor is solid. But are you really ready for retirement? Here are 5 unexpected threats to your retirement that you should consider. 

1. Not Expecting The Unexpected

Life can be wild, so it’s important to consider the unexpected. A $500 car repair or $1,000 for a new refrigerator can leave a major hole in a carefully constructed budget, and these expenses make it tough for the average American to save for retirement. A couple retiring at age 65 should have somewhere around $2 million set aside in order to maintain their standard of living, but the average family has only saved about $160k (per 2013 averages). People are living much longer and have to pay for many unforeseen expenses along the way. Therefore, it’s important to budget for these emergencies, typical expenses, and always save for retirement. Considering the average life expectancy is practical, but what if you live longer? Many people live an extra 10 or even 20 years beyond the average. 

2. Neglecting To Stick To Your Strategy

Together with your financial advisor, you’ve developed an airtight plan for making regular withdrawals. You consider an average return of 8%, and you’ll take 4% just to be on the safe side. But getting spooked by an extended recession or spending large amounts on unplanned “fun” expenses can be problematic. While it’s important to enjoy your golden years, deviating from a carefully considered strategy can put your retirement plan in jeopardy. Stick to your strategy, remain calm, trust your financial professional, and expect the best in the future.

3. Changes In Public Policy

Unfortunately, retirees can no longer expect lower tax rates in retirement. The government is always hunting for revenue, and they know that many elderly residents are a good source. Normally this revenue doesn’t come through increased taxes but through decreased benefits and fewer loopholes. Social Security and Medicare programs are also potential targets, with some of these benefits already being taxed. These changes can be difficult to foresee and can place a strain on your retirement finances.

Related to this, healthcare costs are on the rise and have been increasing faster than inflation. In fact, healthcare can be a major expense during retirement as a recent study puts the figure near $400k for a couple retiring today at age 65. This statistic along with uncertain public policy laws validate that it’s crucial to expect the unexpected.

4. Unexpected Needs Of A Loved One

Our loved ones are important. But if that love equates to financial support, it can create a heavy burden on your retirement savings. Retirees sometimes find themselves supporting children, elderly parents, or even siblings, as well as situations unexpectedly brought on by illness, a job loss, divorce or the death of a spouse. Paying for a child’s college tuition or an elderly parent’s assisted living is a lovely gesture, but one that can wreak havoc on your retirement plans. 

5. Family Status Changes

Although the divorce rate for retirees is lower than for many age groups, it does happen. Occasionally in retirement, couples find that they no longer have common interests and decide to part ways. Similar to when a spouse dies prematurely, unexpectedly breaking up the household can be complicated and devastate your retirement plans. On top of changes to pension and other benefit payouts, extra expenses from no longer sharing a household can drain your retirement accounts. 

The Bottom Line

When it comes to retirement, it’s hard to plan for every possibility. With so many unknowns, it is crucial to expect the unexpected. The trusted financial advisors at Harbor Wealth Management can help you make sure you’re well prepared for retirement and all of life’s twists and turns. Send us an email at or call 985-605-7185 for a no-obligation consultation. Or schedule a phone call with me now.

About Jeremy Smith

With nearly two decades of experience in the financial services industry, Jeremy Smith serves as a dedicated and knowledgeable financial advisor and the founder of Harbor Wealth Management. He specializes in serving retirees, pre-retirees, small business owners, and widows, providing a comprehensive array of investment management and financial planning services. Jeremy aims to serve his clients as a financial guide who is here for their every need, helping families find lasting plans so they can focus on what matters most to them. To learn more about Jeremy, visit or connect with him on LinkedIn. You can reach Jeremy directly at or by calling his office at 985-605-7185.

Securities and advisory services offered through LPL Financial, a registered investment advisor.  Member FINRA/SIPC.

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. You should discuss your specific situation with the appropriate professional.

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