Factors You May Not Have Considered When Planning for Retirement

Retirement—the end of perhaps a thirty-to-forty-year career. You have worked, saved aggressively, paid off your mortgage, met with your financial advisor and now it’s time to pack it in. Whether it’s moving south to Florida or heading west to Arizona, year-round warm weather may be what you have in mind for retirement. However, what happens when things don’t go according to plan? Here are factors you may not have considered when planning for retirement.

Having Children Late in Life

Americans are delaying marriage until much later in life and with that comes a delay in family formation. It’s highly probable that individuals who have children later in life are more financially stable, but it also puts added pressure on their ability to save for retirement, which could come at the same time their children are entering college. This means you will have to prioritize which comes first, saving for retirement or your child’s college education. You can’t borrow for your retirement the way you can for a college education.

A Child Pursuing A Degree

If your child wants to pursue an undergraduate degree or even an advanced degree, this could come at the cost of your retirement. You can use money left over from a 529 plan to offer assistance or help by providing financial assistance through an allowance, paying rent, or buying groceries. If your child works full-time, many employers will offer tuition assistance programs that could help offset the cost. You can always encourage your child to apply for scholarships and grants.

Caring for Elderly Parents

Adults who are simultaneously caring for aging parents and children of their own are known as the sandwich generation. Those who find themselves in this position, mainly women, are tasked with the responsibility of serving as their parent’s power of attorney, managing their finances, paying bills, and arranging care. One of the most difficult undertakings is helping parents move, either out of their home into yours or a retirement community. Shouldering the responsibility of parental care while at the same time planning for retirement may cause additional stress.

Long-Term Care

Separate and apart from traditional healthcare costs, long-term care can be one of the most expensive aspects of retirement. To the surprise of many, long-term care cost is not covered by Medicare. Unfortunately, those who suffer from a stroke, dementia, or even Parkinson’s could find themselves in long-term care which can last several months to several years. Planning for the long term should start in your late 50s to early 60s to get a sense of whether you can self-fund or use a long-term care policy, life insurance policy, or Medicaid planning.

Life is filled with the unexpected, which is to be expected. Retirement planning is a multistep process that evolves over time, and with anything financial, everyone has a different situation which makes it imperative to seek guidance from your tax advisor, attorney, and financial advisor.