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Retirement Planning Expenses That Topple the Best Made Plans

MP900390083 (1)Healthcare and taxes are not the only costs that threaten retirement finances. Some are big, some are small, but all four of these can pack quite a punch.

The old expression “Man plans and God laughs” applies to retirement too. There are things that happen that are out of anyone’s control. The best you can hope for is to plan well enough that a surprise event does not ruin your retirement completely. We’re not talking about higher grocery costs or low interest rates here.

A recent CU Insight article, “4 unexpected retirement expenses,” discusses some things that may not be on your radar when it comes to retirement planning.

Divorce. It’s somewhat surprising to see that the divorce rate for Americans over 65 has almost tripled since 1990, according to Pew Research Center. The divorce rate for Americans 50 and older has doubled during that time. Remarried couples are twice as likely to divorce, as those who only married just once.

Even with these statistics, research now shows that more long-term couples are also splitting up. Among all adults 50 and older who divorced in the past year, 34% had been in their marriage for at least 30 years, including 12% who’d been married for 40 years or more.

AOL Finance reports that the average cost of a litigated divorce is around $15,000. If the divorce is contested, the costs can balloon to $50,000 or more.

Natural Disasters. There were thousands of retirees in Florida, Texas and California who were devastated by the loss of their homes or suffered major damage due to hurricanes, storms, and wildfires. In addition to these traumatic events, many were shocked to discover that their insurance policies did not cover these events or provided just partial coverage.

Fraud. You’ve probably heard that financial fraud is on the rise, impacting Americans with debit and credit card breaches, hackers who obtain personal and private information from credit bureaus like Equifax, malware designed to steal financial information, email scams, phone scams, and other illicit schemes. Annual financial fraud losses for older Americans can be as much as $36.5 billion, according to a 2015 study cited by the CFPB. An article in The New York Times also says that very few incidents are reported.

Housing Crisis—Again? Many people who had counted on the value of their homes for retirement income were devastated in 2008 when housing values tanked by as much as 18% in one year. If your plans allow, consider selling your home now, when inventory is low, and prices are high, and renting for a few years, just in case the unthinkable happens again.

Reference: CU Insight (February 21, 2018) “4 unexpected retirement expenses”