Being unprepared is not a good thing, leaving you to react as they pop up and essentially go with no plan at all.
Retirement can be a defining moment in your lifetime. Whether you want to deal with it or not, the problems are inescapable and the only way to change this is by planning ahead.
Some retirement challenges are
Rising Inflation
Inflation is robbing your money. As prices of goods and services rise, your purchasing power decreases little by little every year. One example of this is a loaf of bread that cost only $1 last year may cost $2 today, which requires twice as much money to be allocated for the purchase.
Drop In Income
An income gap forms when your income sources don’t fully meet your basic requirements. This can happen during the transition from working at a company to receiving a pension. For example. It is critical to have other types of reliable income sources to fill this gap and build confidence in the future.
Risk Of Volatile Market
When the market takes a dive and your business is affected, you might lose some of your biggest clients. It is a dangerous gamble to risk too much on uncertain outcomes when the possibility exists that one may lose everything.
Interest Rate Issues
When interest rates are low, the amount of money you need to fill income gaps increases because you are receiving less income from your money. Therefore, it is important to manage your money well and make smart investments that can generate returns later on.
Rising Healthcare Costs
Health care costs are constantly on the rise, and everyone is feeling the pinch. Although, insurance can cover a lot of your health care cost but it will not cover everything. Depending on the level of care the cost of treatment increases significantly.
Friends , Family, And Well Wishers
Suppose you have good number of friends, family, and well wishers. You wish good for them and want to do good for them. Off course you can lend them some money you are comfortable with.
But if they have some major problem or if they need some bigger amount will you be comfortable lending them as retiree ?. Therefore, its nice to keep a special fund for friends, family, and well wishers too so that you feel good by helping them.
Long Term Care
This type of care is required when you are unable to care for yourself any longer. This may be a caregiver at your home, continuous care in a nursing home or some place in-between like a convalescent care facility for example.
Medical Advancement
Medical Advancement has increased our lifespan. For example average longevity of an Indian few years back was around 50 years but today is around 70 years. In the future longevity is expected to be even higher. This means you will need a longer plan if you want to add few more years to your life.
Being complacent with your retirement plan can leave you exposed to potential problems which could arise if you don’t have a proactive plan already in place. Defaulting to a reactive approach instead, means not having any sort of plan at all and this will leave you unable to save for the future.
