One of the biggest mistakes retirees make is not being financially prepared for the unexpected.
Setting aside funds to help cover the cost of any urgent and unexpected expenses means you won’t need to borrow if a crisis happens and you need money quickly. It can give you peace of mind that you can face any bumps in the road.
Not having an emergency fund – or rainy-day fund – is one of the biggest oversights by retirees. But it’s not easy to put money aside for those just-in-case moments. Especially for those struggling to make ends meets, waiting for the next payday.
In the YourLifeChoices Retirement Matters 2018 survey, we learnt that health is the major concern for retirees.
Around 70 per cent have private health insurance that may cover most unexpected health issues, but what of those who can’t afford insurance? Or those who don’t believe health insurance is necessary?
And what happens when the increasing cost of cover becomes too high a hurdle for struggling retirees to jump?
This is when having an emergency fund may come into play and yet, most retirees can’t afford to have such a ‘luxury’.
And unexpected health issues aren’t the only ‘catastrophe’ faced by today’s retirees. Simple things, such as your car breaking down, your fridge or washing machine blowing up, your hot water service going on the fritz, or even a family member becoming seriously ill can take you by surprise and present enormous challenges financially, physically and mentally.
So, do you have a financial plan in place to deal with this type of situation? Do you feel that you’re prepared to deal with any unexpected retirement expenses?
If you need help building an emergency fund, check out www.moneysmart.gov.au
