5 Financial Situations You Need to Be Prepared for after Retirement

One of the most important responsibilities that people have is planning financially for retirement. While people can spend decades saving and preparing for retirement, there are five financial situations in retirement that need to be factored in to any retirement preparation plan.

Medical Expenses

The first financial situation that can affect retired people are underestimated medical expenses. Retired individuals could spend hundreds of thousands of dollars during their retirement years on medications and unplanned medical procedures. As the cost of health insurance has continued to rise, and people are beginning to live a lot longer, this cost is likely to only increase considerably in the future.

Declining Home Value

A cost that affects a lot of retired individuals today is declining housing values. Many retirees have a long term plan that includes selling their home, downsizing, and living off the equity that they built over time. However, with housing prices declining all over the country, this may not longer be a reasonable plan. Retirees need to avoid relying on this equity for financial support as it could disappear at any time.

Lack of Social Security

Historically, Social Security payments were enough to provide most retirees with enough money to survive financially. Over the next few decades, the amount of retirees will continue to grow, and the amount of workers will not be available to support them all. This will lead to declining benefits.

Death of a Spouse

The fourth financial situation that you need to be prepared for is the death of your spouse. As emotionally straining as losing a spouse can be, it can also be financially challenging. The cost of a funeral can easily exceed $10,000 and those that lose their spouse could lose social security income as well as pension income, depending on the pension plan. Because of this, all people need to factor this in when preparing for retirement. In the case of a wrongful death due to medical malpractice or another issue, filing a lawsuit may be a good option. When hiring a wrongful death attorney in Sacramento residents will be guided through the legal process.

Support for Children

One of the most frequently underestimated expenses in retirement is the cost of still having to financially support children and grandchildren. Due to tougher job markets and rising costs of education, many grown children have to continue to live at home and accept financial support from their parents, even after the parents have moved on into retirement.