Life-Proofing Your Retirement Savings

There’s no crystal ball that can predict life’s unexpected twists and turns. But when life changes hurt your hard-earned nest egg, shrugging and saying “c’est la vie” is not a viable solution.

Luckily, we can always prepare for the unexpected — no crystal ball required.

Let’s take a look at some common retirement planning setbacks and how you can life-proof your strategy.

1) Challenge: Caregiving and Multigenerational Support 

Solution: Review insurance and savings options for loved ones if they hypothetically became dependents. 

If a chance medical or economic scenario would make you responsible for a loved one’s needs, now is the best time to understand their insurance benefits, confirm how you’d access necessary funds, and review your coverage options for dependents (e.g. long-term care coverage). Doing so can allow you to identify gaps before they become financial responsibilities that could impact your savings strategy or increase your expenses in retirement.

2) Challenge: Recessions and Market Crashes

Solution: Diversify your assets and reassess your risk tolerance. 

Portfolio diversification ensures your nest egg isn’t all in one basket and can mitigate risk in an economic downturn. As you near retirement, it’s also worth reevaluating your general strategy and considering more conservative investments that can weather the storm of market volatility with less drastic shifts in value.

3) Challenge: Divorce

Solution: Store all your financial documentation for safekeeping and learn the rules and tax requirements regarding the division of assets in retirement plans. 

The idea of preparing for a potential divorce sounds pessimistic, but the costs of not doing so can be devastating. Proper research and documentation are small actions that help you and your spouse avoid expensive legal headaches and establish a “what if” strategy for secure retirement finances without shared assets and income.

Is your nest egg life-proof? Reach out with your questions and concerns to get professional answers and bolster your strategy.