Unexpected Costs That May Effect Your Retirement Savings

You plan for your retirement since you start working, but some things just can’t be planned. Today, many things are different than they were when you started to save. These things are things you didn’t take into account when you started saving, and could hugely impact your retirement savings balance.

1. Dependent kids

Nowadays, kids are staying home and relying on their parents financially a lot later than you relied on your parents. Due to the struggling job market, these kids struggle to find jobs that will support them financially and many depend on their parents. In fact, over a third of people today who are aged between 18 and 34 are living with their parents. This number means parents are likely to have to retire later. If your kids are depending on you, you should discuss this with them and encourage them to find ways to become more financially independent. Set boundaries.

2. Dependent parents

On the other hand of the spectrum, you also have more elderly parents moving in with their kids then ever before. This generation is called the sandwich generation as they have both their kids and their parents depending on them financially. The best solution is to look up in your local government what your parents are owed in terms of money. Also, it is a good idea to look at local nonprofits who may be able to help.

3. Divorce

Another thing you can’t plan for. Divorce rate has risen by 109% from 1990 to today. Many couples begin to drift apart after their kids leave home and they become empty nesters. This cost of divorce is expensive. You’ll have to split assets and will have an increase in expenses. You will also need to split the retirement fund that you are most likely sharing. Another cost is that one of you will need to leave their house and find a new place to live, which is an unexpected cost. Your retirement savings is going to suffer because of this.