How to Prepare for Life’s Curveballs Through Retirement Planning - Newcastle Financial Planning Group
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Retirement Planning

How to Prepare for Life’s Curveballs Through Retirement Planning

If there’s one word that can describe life, it’s this: unpredictable. 

There is no way to know what’s coming in the next minute, hour, day, year, or decade. Some people seem destined to live comfortable, happy and financially secure lives until an unexpected curveball is thrown their way, and all their plans go to waste.

There are many life events you can never really prepare for, e.g. the unexpected death of a spouse, divorce or serious illness can be emotionally painful. Besides the psychological stress, it will also tremendously affect your finances.

Although money is not the most important thing that will get you through your retirement, it will help you to feel comfortable and stress-free. So it is best to be prepared for the common curveballs life may throw at you.

 

5 common curveballs that could affect your plans for retirement…

 

Healthcare and Medical Costs:

As you age, it is likely that more of your expenses will be diverted to maintaining good health. 

After retirement, healthcare-related costs may be your most significant cost of living. Unfortunately, it is nearly impossible to truly prepare for any future medical costs. 

While you may be fit and healthy now, unfortunately, you have no idea what the future of your health looks like and how much healthcare costs may cost you. Planning for the unexpected may be the key to feeling financially secure in retirement. 

 

Job loss:

Another thing that is difficult to prepare for is job loss. 

There is no telling what industries and jobs will overcome all future economic challenges. Now, more than ever, it is next to impossible to predict the future of the job market. 

You can never be sure that you will be able to maintain a steady income until your retirement which is why financial planning is essential to achieve your retirement goals. 

 

Children:

In Australia, the costs of raising a child for 18 years can range between $159,120 up to $548,500. Further, many children are living with their parents past the age of 18 nowadays meaning those costs will again rise. 

While most expecting parents financially plan for raising children, the actual costs can be overwhelming when not planned for appropriately. 

 

Divorce:

The financial implications of a divorce don’t end with the legal costs of filing for one. Your income, expenses, savings and assets are altered drastically if you are separated from your spouse. Additionally, you may need to account for support and spousal maintenance.

At a time that is already emotionally challenging, the financial implications can be further stress-inducing if not planned for. 

 

Long life:

Surprisingly, one of the things you can’t really prepare for is how long you will live. 

In Australia, men aged 65 could be expected to live another 19.9 years (life expectancy: 84.9 years) and women could be expected to live another 22.6 years (life expectancy: 87.6years). If you retire at 65, it is expected you will still have two or more decades of daily expenses to plan for. 

 

The Importance of Retirement Planning

Aside from these well-known curveballs, there’s no telling what the future holds. For example, no one planned for the 2008 GFC or the COVID-19 pandemic. Unknown future events may significantly affect your finances and your life after you leave the workforce.

Since the maximum Centrelink Age Pension for individuals or couples isn’t enough to support a comfortable lifestyle, it’s unwise to rely on it entirely for your after retirement expenses. Inflation rates also lead to higher living expenses, so you need to set yourself up while you’re in the workforce.

For this reason, it’s crucial to begin retirement planning as early as possible. You need to be prepared for life’s curveballs, and you need to have fail-safes in place to make sure that you will have a stress-free and comfortable retirement. 

 

Small actions over long periods build up to well-earned financial security.

No one can predict the future, and you never know when life will throw a curveball at you and disrupt your normal life. While there’s no real way to prepare for the unexpected, a robust retirement plan can help cushion you from life’s blows.

If you want to live comfortably through your twilight years, consulting with a financial planner will help you get there.

Newcastle Financial Planning Group’s team of financial advisers help to make sure each and every one of our clients are retirement ready. We can help you build strategies to ensure lifelong financial security. 

If you’re looking for retirement planning advisers in Newcastle, book a complimentary meeting with us today!

DISCLAIMER: The views expressed in this publication are solely those of the author; they are not reflective or indicative of RI Advice Group’s position and are not to be attributed to RI Advice Group. They cannot be reproduced in any form without the express written consent of the author. This information (including taxation) is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice. Newcastle Financial Planning Group, Central Coast Financial Planning Group and Sydney Wealth Advisers are subsidiaries of Coastal Advice Group which is a Corporate Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429. 

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