{"id":2050,"date":"2022-03-26T02:01:54","date_gmt":"2022-03-26T02:01:54","guid":{"rendered":"https:\/\/linksus.net\/a-financial-shock-could-wreck-retirees-or-pre-retirees-finances-heres-how-to-be-ready-usa-today\/"},"modified":"2022-03-26T02:01:54","modified_gmt":"2022-03-26T02:01:54","slug":"a-financial-shock-could-wreck-retirees-or-pre-retirees-finances-heres-how-to-be-ready-usa-today","status":"publish","type":"post","link":"https:\/\/linksus2.linksus.net\/index.php\/2022\/03\/26\/a-financial-shock-could-wreck-retirees-or-pre-retirees-finances-heres-how-to-be-ready-usa-today\/","title":{"rendered":"A financial shock could wreck retirees' or pre-retirees' finances. Here's how to be ready. – USA TODAY"},"content":{"rendered":"

You might not be planning to experience unexpected financial shocks in retirement. But you should be according to the results of a survey recently published Society of Actuaries Research Institute\u2019s Aging and Retirement Strategic Research Program.
According to a recent Society of Actuaries survey, about half of the pre-retirees report experiencing some type of unexpected financial shock, as well as more than 4 in 10 retirees. And, 1 in 5 pre-retirees report that these shocks have reduced their assets by 25% or more and reduced their spending by 10% or more.
The good news is that far fewer retirees report these reductions, according to the 2021 Retirement Risk Survey Report of Findings<\/a>. For example, just 1 in 10 retirees (11%) report that shocks reduced their assets by more than 25%.
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Other key findings: When asked what they could afford to spend out of pocket on an emergency without jeopardizing their retirement security, half of pre-retirees report that they could only afford to spend $10,000 or less and more than half of retirees could afford no more than $25,000. Black\/African American pre-retirees (61%) are more likely than pre-retirees in general (40%) to be impacted by an unexpected expense of up to $10,000.
Among retirees, Black\/African American respondents (58%) and Hispanic\/Latino (52%) said they are not able to spend $10,000 without it affecting their retirement security. This was much greater than the general retiree response (32%), according to the Society of Actuaries survey.
So, what to make of all this? How might you, be you a pre-retiree or retiree, better prepare for unexpected financial shocks?
Most financial planners recommend that you have at least three to six months of living expenses set aside for, well, emergencies or financial shocks, such as a new roof or dental work.
\u201cEarly in my career, I had a 90-plus-year-old client say to me regarding financial assets, \u2018You never know what it will take to get you out of this world,\u2019\u201d said\u00a0Bill Harris,\u00a0a certified financial planner with WH Cornerstone Investments. \u201cHer life wisdom was spot on. I use that quote to tell pre-retirees with \u2018constrained\u2019 or under-funded retirement assets that life has its unexpected turns. We also tell pre-retirees, \u2018You can never ever save enough for retirement. An emergency fund is always needed.\u2019\u201d
SMART STRATEGY:\u00a0\u00a0<\/strong>Focus on\u00a0emergency fund and wiping out high-interest debt\u00a0<\/a>
Unexpected spending shocks are a reality at any age, said Roger Whitney, host of the “Retirement Answer Man” podcast<\/a>. \u201cWhen they happen in retirement \u2013 after income from work ends \u2013 they aren\u2019t as easily absorbed or worked through,\u201d he said. \u201cTo be better prepared, create options for your future self to deal with a shock. Building cash reserves above a normal emergency fund, eliminating debt to lower fixed monthly payments, or working part time can help create financial slack to help you be agile as your retirement life unfolds.\u201d
RETIRED?<\/strong>\u00a0 Make sure you have these 4 forms before you file your taxes<\/a>
To better prepare for an unexpected financial shock, pre-retirees need a sense of other funds they might have access to such as home equity line of credit or 401(k) loans, said Nicole Sullivan, the co-founder and director of financial planning at Prism Planning Partners<\/a>.
If you do plan to borrow money to cover any financial shocks, Sullivan recommends creating a plan to pay back any borrowed funds. \u201cIt\u2019s a must,\u201d says Sullivan. \u201cWe all have \u2018fluff\u2019 in our budgets and trimming is helpful.
If you can\u2019t borrow money to pay for a financial shock or you don\u2019t want to borrow money, Sullivan says \u201ccoming up with creative “side hustles” to bring in extra income is a great option. \u201cSide work could also help pre-retirees explore what they might want to do once they\u2019ve retired,\u201d she says.
WORKING IN RETIREMENT:\u00a0<\/strong>\u00a0Is it a good idea? Weigh these pros and cons.<\/a>
Robert Powell, CFP\u00ae, is co-founder of finStream.tv and editor of TheStreet\u2019s Retirement Daily. Got questions about money? Email Rpowell@finstream.tv<\/em><\/p>\n

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You might not be planning to experience unexpected financial shocks in retirement. But you should be according to the results of a survey recently published Society of Actuaries Research Institute\u2019s Aging and Retirement Strategic Research Program.According to a recent Society of Actuaries survey, about half of the pre-retirees report experiencing some type of unexpected financial […]<\/p>\n","protected":false},"author":869,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[],"tags":[],"_links":{"self":[{"href":"https:\/\/linksus2.linksus.net\/index.php\/wp-json\/wp\/v2\/posts\/2050"}],"collection":[{"href":"https:\/\/linksus2.linksus.net\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/linksus2.linksus.net\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/linksus2.linksus.net\/index.php\/wp-json\/wp\/v2\/users\/869"}],"replies":[{"embeddable":true,"href":"https:\/\/linksus2.linksus.net\/index.php\/wp-json\/wp\/v2\/comments?post=2050"}],"version-history":[{"count":0,"href":"https:\/\/linksus2.linksus.net\/index.php\/wp-json\/wp\/v2\/posts\/2050\/revisions"}],"wp:attachment":[{"href":"https:\/\/linksus2.linksus.net\/index.php\/wp-json\/wp\/v2\/media?parent=2050"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/linksus2.linksus.net\/index.php\/wp-json\/wp\/v2\/categories?post=2050"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/linksus2.linksus.net\/index.php\/wp-json\/wp\/v2\/tags?post=2050"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}