Expect The Unexpected

Retirement, Income, Tax & Estate Planning.

Expect The Unexpected

August 5, 2020 Investing Newsletter Retirement Planning Stock Market 0

When I talk to my clients, one of the things I hear most often is “We’ve never lived through anything like this before.” And that’s very true. 2020 has been an adventure to say the least. But I take that time to remind them that the world may be changing, but their retirement needs aren’t. And no matter what the world throws at them, we always make sure they’re ready for it. When we say holistic, we mean it.

A surprise expense can put a damper on the future if your retirement plan’s not done exactly right. When it comes to tax planning, we always look to avoid April surprises—unexpected fees, penalties, or miscalculations that require additional payments. With investment planning, we make sure you’re not overexposed to risk, and work to avoid losses that can kill earnings for years to come. With income planning, it’s all about making sure you don’t run out of income before you run out of time… and making sure you can handle a surprise expense here and there along the way.

Surprise expenses may be on a lot of folks’ minds this year, with COVID-based layoffs forcing early retirement onto a lot of people, as well as Tropical Storm Isaias ripping through the area causing wind and flood damage this week. Heck, a few folks even had tornado damage! Did you see the cars in Doylestown? Now… you might be reading this and saying, “If you’re planning for it, is it really a surprise expense?” The reality is, every comprehensive retirement plan needs to account for an unexpected pull here and there. I found a chart of actuarial surveys that looked into who reported what, and here are the top unplanned expenses and the number of retirees who have reported something similar:

  • Major home repairs – 28%
  • Major dental expenses – 24% (how is dental insurance always less effective than medical?)
  • Significant out-of-pocket medical or pharmaceutical expenses – 20%
  • Drop in home value by 25% or more – 16%
  • Illness or disability – 15%
  • Drop in savings by 25% or more – 14%
  • Going on Medicaid – 14%
  • Family emergency – 12%
  • Drop in savings by 10% or more – 9%

How many of these have you thought about? How many of these have you had to deal with already?! I know more than one person who said a few words they weren’t proud of once they found out how much it was going to cost to get a single tree cut down. The fear of the long-term effects is almost as bad as the actual financial pain suffered.

If you’re not sure your current plan could weather the impact of an unexpected hit, it’s not a reason to be fearful. It’s a reason to do some more strategizing. And we can help with that. Give us a call at 215-657-9200. Or just use Calendly to book some time with us online.

Peter