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Avoiding Retirement Shock

Core Facts

Wednesday, December 20, 2017

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:

Spending Plan

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.

Long-Term Care

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.


Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.

Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable-- we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC

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Founded in 1976, David Lerner Associates is a privately-held broker/dealer with headquarters in Syosset, New York and branch offices in Westport, CT; Boca Raton, FL; Lawrenceville, NJ; and White Plains, NY. For more information contact David Lerner Associates Call 516-921-4200 Visit our website: www.davidlerner.com

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Jake Mendlinger
Account Manager
516.829.8374 X 232

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