Retirement should be a time to enjoy yourself and look after yourself, whether you want to simply relax, garden, travel, or dedicate more time to hobbies and interests. Money worries can turn retirement into a period of stress, which is why early retirement savings planning is typically recommended.
For those with chronic illness at a younger age, it can be hard to even imagine this sort of time into the future, and this post won’t apply to everyone. However, if you start contributing to a retirement fund and making investments from a younger age, even when you think you needn’t be worrying about it yet, you will have a much more comfortable environment when the time comes to be looking at retiring.
Derailing Retirement Savings
Unfortunately, life is always unpredictable and even the most prepared people can run into trouble with their retirement plans. Certain life events can throw a real spanner in the works and derail your preparations. This collaborative post takes a look at just three of the unexpected events that can disturb your retirement savings plan; while many are going to be out of your control, it can help to be mindful that they’re possible while hoping they never do happen to you.
An Economic Crash
If the market crashes, like it did back in 2008, all of your assets will typically lose value. If you have a lot of money in investments and retirement accounts, the value will nosedive and your retirement plan goes out of the window overnight. Even though the economy will eventually get back on track, it can take a long time for your assets to recover, and you need to change your plans to account for that. In some cases, you may need to delay your retirement until you can save more money. Alternatively, you could look into options like reverse mortgages to give yourself some more expendable income. Having a back up plan should the worst happen will enable you to respond more quickly.
Divorce
When you get divorced, your retirement assets will usually be divided between you and your spouse, which puts a lot of pressure on your finances in later life. When you file for divorce, you may have to file a divorce financial order, which determines how your assets will be divided. Your retirement accounts won’t necessarily be split down the middle because things like income and the contributions each party made will be considered. However, it is likely that you will lose some of your retirement savings, so you will need to adjust your budget accordingly and consider increasing contributions in the meantime.
Illness Or Injury
If you are seriously injured or you have a long term illness that means you are out of work, this can make it incredibly difficult to save for retirement. It’s not just retirement savings but issues around government pensions that can be affected also. If you are only out of work for a short period, your sick pay might cover expenses and allow you to save a little bit of money until you can get back to normal. But you’re less likely to be able to build a healthy retirement fund if you are on long term sick leave. If this happens in later life, you may decide to readjust your budget and retire early. However, if this happens earlier, you may need to think carefully about your retirement plans and how to work around the challenges.
This could involve, for instance, looking at different long term investments to boost savings, making cut backs and sacrifices to reduce expenditure or looking into additional government support or charitable grants if you need extra help. There are different charities and government advice lines to contact to discuss your options, as well as talking to your bank or getting a feel for other avenues to explore from financial sources online.
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These big life events can get in the way of your retirement plans, causing a lot of additional stress and worry. Of course we’d like to hope the worst won’t happen, but it’s good to be mindful of the potential hindrances in future. There are ways to change your approach and adapt, so having a backup plan in mind and knowing your options in advance can be helpful.
[ This is a collaborative post ]
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13 comments
Our retirement plans have been battered recently. Great advice!
Great information. It’s always good to have a backup plan.
Yeah, you never know when life might lead you off on an unexpected track.
This is important information since we never know what life will deal us. Thanks for putting this together, Caz. xo
I don’t think I will ever retire. I can’t sit still for long enough ????????
Yes all three can do in your retirement plans. We hope we’ll not have issue with any of these things, but you never know.
Have a fabulous day, Caz. ♥
Knowing these potential saboteurs of retirement funds can help you prepare for them. For example, good health and life insurance, a prenuptial agreement, will, living will, savings…Thank you for reminding us. Very helpful and thought -provoking post, Caz! Hope you are doing well and enjoying life. <3
Great tips, Caz. I know it’s not always possible, however, owing your own home takes such a lot of unpredictability out of retirement. Something ‘unpredictable’ can always happen, as you say, illness, divorce, etc. But, investing in yourself financially, in whatever way one can, is definitely the greatest boon. xoxoxo
Yep, who’d have known that at a fit 50 year old I’d become unwell and have to take medical retirement! Fortunately I worked for the NHS and paid into their Pension Scheme so my income’s not too bad. Great advice Caz and like me, anyone’s pension plans can be derailed at any time.
Charlee: “We sure hope nobody bought Bitcoin recently, considering what’s going on with that!”
Chaplin: “Yeah all the smart investors are going for SmurfCoin now.”
Lulu: “You know Producer Smurf just made SmurfCoin up, right?”
Chaplin: “I know, but he gave me some free SmurfCoin in exchange for pushing it.”
Lulu: “But it’s worthless.”
Chaplin: “Sure. But it was free.”
I’m not sure we’ll ever be able to retire. Not if we want to continue to support our pets in the lifestyle to which they have become accustomed, anyway …
I do worry about retirement and pension as I can’t work. I have no idea where to seek advice and don’t know where to start. Life can be real scary sometimes!
The world political climate right now is so volatile. I can totally envision an economic upheaval! Good post!