Unexpected retirement costs in an unpredictable world

We all know life has a tendency to not always go as planned, and the only thing you can truly expect is the unexpected. 

 

What kinds of costs should you be prepared for? 

Whether you're standing on the threshold of receiving your pension or balancing daily chaos with retirement planning as the last thing on your mind, now is a good time to ask yourself if you’re prepared for the unexpected, such as: 

• Healthcare challenges: Connie was at the peak of her career when a health setback forced her to reduce hours and absorb unexpected medical costs that weren’t covered by her Medical Services Plan. She fears she’ll be forced to sell the family home she fought so hard to acquire after her parents died. 
• Job loss near retirement: Less than ten years from retirement, Jacob was laid off and is struggling to find a new job. He and his wife have been thinking about applying for a home equity loan to cover living expenses. 
• Divorce in later years: Arjun worked hard all his life to provide for his family. Now that he and his partner have determined they will divorce, Arjun is feeling the impact of managing living expenses solo. 
• Supporting adult children: Just when Rasha had adjusted to empty-nest syndrome, her adult son moved back in bringing along her granddaughter—and a load of debt. 

 

Future-Proofing Your Retirement 

Life's twists and turns can derail your plans, especially in retirement. Your future-self will thank you for taking these steps today to protect yourself against unexpected costs.

Develop a budget that evolves with you 

Make sure your budget has room to pivot and breathe so unexpected expenses don’t derail all your plans.  

• Examine your wants vs. your needs. Know what expenses could be reduced in times of lean. 
• Have a backup plan for your short and long-term goals. 
• Use our retirement calculator with this government retirement planning worksheet to estimate future income. 

Build an emergency fund

Having a rainy day fund of 3 to 6 months saved helps keep things afloat when surprise costs or extended budget strains happen.  

• Keep it simple; start small by automating $10/week transfers. 
• Examine your monthly expenses, and trim out the ones you can go without, such as streaming service subscriptions, and contribute the difference to your rainy-day fund. Send windfalls, like tax rebates or bonuses, directly to emergency savings. 

Take advantage of tech

Modern tools can make financial management feel effortless—or at least, make things easier.  

• Start by asking your bank. If you’re a member of our credit union, we’re happy to walk you through our tools! 
• Explore government financial calculators or explore reviews on the best budgeting apps.
• Be cautious when it comes to advice from apps. Some tools and apps may be designed to help you in “normal” situations, but they won’t understand your complete financial picture or help you pivot quickly if circumstances change. A financial advisor can help you fill in the gaps and give you a better picture.   

 

Diversify your income streams  

Adding income streams can take some of the pressure off a tighter budget.  

• Network and develop new skills to unlock future income-generating opportunities and health benefits.
• More Canadians are working past retirement, including making later career changes.  
• Be careful you don’t exceed income limits if you are already collecting a pension, OAS or GIS.  

Check in on your finances regularly 

When you regularly review your plan, you will more easily be able to adapt if and when your circumstances change.   

• Schedule annual check-ins with your advisor to review your needs and take advantage of new tax legislation or savings tools. 
• 83% of Canadians with a plan feel financially prepared for retirement—of those, over 80% used a financial advisor to build that plan.  

Save helpful resources   

Knowing what supports are available will help you feel prepared. 

• Explore government support programs for seniors' healthcare and social security.  
• Improve your financial literacy with programs like those offered by Seniors First BC or CPA British Columbia.  

 

Seek out emotional support 

Financial health is closely linked with mental health.  

• In one survey, 36% of respondents reported experiencing anxiety or depression over their financial situation.  
• Reach out for support if you’re struggling to cope with unexpected challenges.  

Plan today for tomorrow’s uncertainties 

Life is unpredictable, and unexpected challenges can strain your retirement plans.  

Navigating these twists requires proactive and personalized management that can’t be matched by automated banking solutions. When tomorrow’s uncertainties arise, you’ll want to talk to an advisor who understands the complexities you face and can help you pivot strategically. Book an appointment today.

Take the first step towards fortifying your retirement with the actionable tips above. Your future self will thank you for safeguarding your financial well-being.