Life Risks that Can Derail Your Retirement

Unexpected Responsibility

Life happens at the most inconvenient times. Parents break up and move into their parents’ home with their young children. A car accident may take the life of a parent, sending a child to their grandparents. Unexpected financial responsibilities during retirement can completely redraw the dreams of the golden years overnight. That extra bedroom may be occupied for a long time.

Public Policy Changes

The government can change public policy virtually at a whim, whether through executive order or legislation. Case in point: Social Security. For years, politicians promised baby boomers they would not touch their Social Security benefits. But last November, in the stealth of night, Congress eliminated “file and suspend,” a benefit that affected baby boomers the most. The president signed to on to the change. Remember, they can change any policy at any time. 

Taxes

One old adage of a retirement that you could bank on was paying lower taxes in retirement. Those days may be gone forever. The U.S. debt is almost $20 trillion. The future pension obligations to military, federal and state workers are three times that amount. The government will be on the hunt to raise revenue. So far, no administration has plans to use new taxes to pay down old debts, but don’t be surprised the new paradigm is higher progressive taxes for the rest of this century.

Just Plain Bad Timing

It’s never the best of times, when the worst of things happen. It always seems like bad things happen when you least can afford them to occur. If timing is everything in life, then you better plan for bad times. Money may be tight, but the roof needs repair, the furnace needs replacing and your car needs major maintenance. Life just happens at the worst of times. Plan for it.

Things in life can derail your retirement, so you need to create some contingency plans to keep your retirement on track.