More than half of Americans experience stress over their retirement. This is mainly because they face the uncertainty of what the future holds for them. Lacking a clear strategy and goal contributes to this stress as well. Studies show that people who are confident about their retirement have a clear goal and vision for their future.
However, unexpected expenses can (and usually do) arrive in the least welcome of moments, and if you’re not prepared for the worst, then it’s likely to be a horrible shock to the system. For example, what would happen if there were an illness that required long-term care expenses that may run into the hundreds of thousands of dollars? Say goodbye to your retirement plans in Boca Raton.
Here are some things you can do to shore up against a potential storm of financial shock:
Identify expenses that are required for living (mandatory), and those that are mere choices (discretionary). Your mandatory expenses include your cost of housing, what you spend for food, insurance, utilities, and perhaps a car. Your discretionary expenses include such items as travel, entertainment, and gifts. The key is to identify your required expenses that come due every month no matter what, and separate them from the extra expenses you take on just because you can afford them.
Also, find ways to cut back on the things that are mandatory expenses. Refinance your mortgage, eat out less, find ways to save on travel, is there a less expensive cell phone plan, internet plan, etc.
If something were to happen to you that resulted in your not being able to care for yourself, what would you do? Do you have long-term care insurance? Do you have family who would come and take care of you? Assisted living? There are many options, but it’s better to have a plan just in case.
Avoiding retirement shocks is not fool-proof. You may experience bumps along the journey. But planning ahead — and saving as much as you can — is a much better idea than getting surprised when you can least afford it.
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