4 things that can derail retirement

You’ve heard about the best-laid plans of mice and men? Well, when it comes to retirement planning, unforeseen expenses can have a devastating effect on your clients’ long-term security. This month’s global view highlights four things that can derail even the best-laid retirement plans, along with advice on how to plan for the unexpected.

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• The future is increasingly female: Helping women plan for longer life expectancies

• Health care and other major life events. The Globe and Mail’s Alexandra MacQueen looks at a recent Ontario Securities Commission report that found six in 10 Canadians have experienced a major life event that disrupted their financial plan. Among the most common: providing financial support to a family member in need, health emergencies and stock market losses that can’t be recouped.
• Living too long. The first person to reach 150 years of age has already been born, according to Eric Rosenbaum’s CNBC article on the impact of a really, really long life on employment and retirement planning.
• The cost of technology. Is your retirement planning future-ready? That’s the question posed by this MarketWatch article by Joseph F. Coughlin, director of the Massachusetts Institute of Technology. Coughlin points out that technology like smartphones and tablets are relative newcomers and yet we are increasingly dependent on them. In future, expensive robotic health assistants and wheelchairs may be necessities for physically frail retirees.
• Not saying ‘I do’ to your wife’s retirement planning insights. In this Bloomberg Business article, Carla Fried makes the case that ensuring women are part of the financial planning process makes good sense. Not only do they tend to live longer (making it imperative for the money to last), they tend to be long-term thinkers and less over-confident about investing.

What to do about it: Susan B. Garland’s article in Kiplinger’s Retirement Report covers off how to budget for the OSIFs (“Oh, shoot, I forgot” items) and the “unk unks” (unknown unknowns). Suggestions include cash reserves and medical gap policies.