New York - Regardless of how well you plan you financial future, several unexpected or expected events can threaten or affect your plan. Consider the following::
High Inflation - If inflation is higher than you planned for - you may be negatively impacted. Inflation can erode your buying power faster than your income grows from dividends and interest. This risk is significant especially when you consider the already high costs of health care.
Your family's health - An unexpected illness to yourself or you family can not only cause emotional distress- but it may substantially affect the amount of money available for your retirement. On the good side, you may actually be extremely healthy and underestimate your cash needs.
Income taxes - If the government changes the tax structure or you have more taxable income than you planned, you may find yourself in a higher tax bracket than you while you were working. This situation may cause you to have less disposable income that you thought you would have.
Pension mishaps - Although some pension plans are partially guaranteed by a government backed agency, it is conceivable that your company or it's pension plan may not be able to support the retirement needs of all employees. It has happened in the past and there is no reason why you should expect it not to occur in the future.
Social Security Impact - Although investors should count on receiving some benefits, given the current state of the Social Security system, there will undoubtedly be significant future changes.
Market crashes - Many individuals keep too much money in the stock market. As they get ready for retirement, the market may undergo a severe market correction which may create havoc on retirement plans.
Whatever financial plan you develop - you need to ensure you understand and plan for contingencies like identified above.
Your independent Fee-Only financial adviser can help you determine if your retirement plans properly plan for the above threats.
Founded in 1998, The Independent Adviser Corporation has assisted thousands of individuals, families, and businesses. We are 100% independent and objective and offer free private consultations to our clients. Our company publishes free investment research and educational materials, and when specific financial or legal advice is needed, we connect clients with a network of FEE-ONLY professionals. For more information, become a member or to schedule a free consultation, please visit our website at TheAdviser.com or 1800ADVISER.COM.