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What Could Possibly Go Wrong . . .  in Retirement?

What Could Possibly Go Wrong . . . in Retirement?

April 25, 2022

As a financial planner who is always my client’s advocate – a fiduciary advisor – I work hard to help my clients identify their financial priorities and make plans to reach their goals safely. But as I get older, I’m reminded of a quote from a Robert Burns poem, “the best-laid plans of mice and men often go awry.”

Even if we do great work of thinking through our priorities and needs. Even if we make excellent choices to move systematically toward those goals, we can be way laid by the unexpected. It’s just a fact of life.

Caregiving Ain’t for Wimps

Look at Amy Goyer, a long-time executive with AARP. She had tons of knowledge and information about healthcare, aging and caregiving, but even she was financially overwhelmed by the cost of caring for aging parents. Her story can be found in a recent Wall Street Journal article.

Her situation is not unique. According to the Family Caregiver Alliance, about 34.2 million Americans have provided unpaid care to an adult age 50 or older in the last year. Many more of us will find ourselves in this role sooner or later. And it’s nearly impossible to predict exactly how your situation will play out.

Sometimes You Don’t Know What You Don’t Know

Part of the challenge of preparing for big financial goals like retirement is that there are MANY variables. And humans are especially bad at long-term planning. Nobel laureate Daniel Kahneman describes this as “narrow framing,” the tendency to minimize the size and scope of situations and therefore fail to see their full implications. We see the tree. We miss the forest.

One of the most critical variables in retirement planning is the length of time that we have to live. We use excellent resources to estimate and predict how long we should plan to live, but we can’t be sure we won’t live 10 years longer or won’t get very sick for a very long time. To hedge these unknowns, I always counsel clients, to assume they will live longer and to assume they will need more healthcare than they reasonably expect. But even these hedges are not always enough.

Take David for Example

David missed only 1 day of work in 33 years at a Fortune 500 company. One day he collapsed on the golf course and later found out he had a brain tumor. Suddenly, his spouse needed to take over many family matters David had always handled. But the family did NOT have trusted contact information, powers of attorney, and medical proxies in place. With David unable to act, it was much more difficult to set up these basic estate planning documents.

This is a reminder of why I ALWAYS urge clients to prepare basic estate planning documents and keep them current.

Nobody plans to have a sudden health event, but it happens. And it happens more often as you age.

If you find yourself wanting to talk about your situation and how you can better prepare for the unexpected events in your financial plan, I would be honored to visit with you. Just follow this LINK to find a time to talk.

And, if you would like to talk with a couple of financial planners, a great place to start is to search for a CERTIFIED FINANCIAL PLANNER™ professional near you.

To find a CFP® professional near you, start your search here.

A fiduciary, fee-first, CFP® professional can help you make great retirement income choices and develop a comprehensive financial plan that is driven by your goals and priorities and addresses all aspects of your financial life. With a big-picture approach, you will be better prepared to understand your options at every step along the way.

Yes, I am a CFP® professional. I’m always a fiduciary and I work on a fee basis. And yes, I’m still taking on a few great families to be part of my financial planning practice.

If this article has you thinking about your own circumstances, contact my office at rdunn@dunncreekadvisors.com. I am always happy to meet with people who are working on their retirement plans. Dunncreek Advisors does not provide legal or tax advice, nor is this article intended to do so.