Retirees may find themselves experiencing unforeseen and difficult circumstances at one point in time or another. Certain situations can leave them wondering what they could have done to better prepare themselves to handle unexpected occurrences, especially when it comes to highly complex issues. Here are three circumstances where implementing an effective retirement strategy can and may help retirees better prepare themselves for the unexpected.
One common unanticipated situation a retiree may encounter is financial losses. Losses can be a result of several events that may include but are not limited to returns on an investment, liquidation, fraud, inflation, market volatility, and others. Devising, implementing, and executing an effective strategy can make their effects less severe or even help prevent some of these circumstances from occurring as their strategy should include preventive steps to avoid potential incidents.
Sudden Death of a Loved One
Another abrupt and unexpected circumstance a retiree may experience is the death of a loved one. This type of devastating situation can severely affect the retiree not only emotionally but also financially. For this reason, devising a strategy that includes a legacy component can be beneficial as it can help reduce the financial burden on the retiree to allow them to focus on grieving.
Healthcare Long-Term Expenses and Gaps in Coverage
As healthcare costs continue to rise, expensive costs associated with long-term care are another type of unexpected situation retirees may experience. Medicare does not typically provide long-term care benefits, forcing retirees to pay out-of-pocket for care. A health expenses strategy can better prepare them for this type of incident as it should include an allocation of funds for healthcare services and costs associated with gaps in coverage.
The Bottom Line
These are only to mention three common unexpected circumstances retirees may be exposed to and how careful planning can better prepare them to handle these situations. A robust and complete strategy should include legal instruments like a will and/or a trust, power of attorney, healthcare power of attorney, beneficiary designation, guardianship designation, and a letter of intent at minimum. Combining these components with a variety of insurance policies or other financial products as appropriate can help provide greater assurance that you’re positioned to weather whatever comes your way.