Even for the most prepared retiree, unexpected expenses during retirement can derail a carefully crafted financial plan.
Some of these risks are more obvious than others. Not having enough money to cover expenses and outliving savings are two risks that most people think about when planning for retirement. But less-obvious expenses can sneak up on retirees and cause both minor and major impacts to their financial situation.
The Society of Actuaries studied the impact of unexpected or shocking retirement expenses during its 2015 update to its biennial risk survey started in 2001. The study followed up with focus groups to supplement regular surveys with people who were retired at least 15 years to understand the long-term impact of a lack of retirement planning. While almost three in ten retirees (28%) report experiencing none of these shocks or unexpected expenses, 13% say they encountered three and 19% encountered four or more in retirement. One-quarter of retired widows (24%) indicate they have encountered four or more.
The society asked retirees and retired widows which retirement expenses they had encountered during retirement. Read on the find out about these costs, along with the relevant break down by age, gender and household income.
17. Loss of capacity requiring someone outside the household to manage your money
Retirees: 1%
Retired widows: 1%
Men: 1%
Women: 1%
Age 45-59: 4%
Age 60-69: 0%
Age 70-80: 1%
Household income less than $35,000: 2%
Household income $35,000 – $74,000: 1%
Household income greater than $75,000: –
16. Divorce during retirement
Retirees: 3%
Retired widows: 1%
Men: 3%
Women: 3%
Age 45-59: 3%
Age 60-69: 4%
Age 70-80: 3%
Household income less than $35,000: 5%
Household income $35,000 – $74,000: 2%
Household income greater than $75,000: 2%
15. Significant damage to or loss of home due to fire or natural disaster
Retirees: 3%
Retired widows: 4%
Men: 2%
Women: 4%
Age 45-59: 5%
Age 60-69: 2%
Age 70-80: 3%
Household income less than $35,000: 2%
Household income $35,000 – $74,000: 4%
Household income greater than $75,000: 2%
14. Loss of home through foreclosure
Retirees: 3%
Retired widows: 6%
Men: 2%
Women: 3%
Age 45-59: 6%
Age 60-69: 3%
Age 70-80: 2%
Household income less than $35,000: 4%
Household income $35,000 – $74,000: 2%
Household income greater than $75,000: 1%
13. Bankruptcy
Retirees: 4%
Retired widows: 4%
Men: 5%
Women: 3%
Age 45-59: 8%
Age 60-69: 3%
Age 70-80: 4%
Household income less than $35,000: 7%
Household income $35,000 – $74,000: 3%
Household income greater than $75,000: 1%
12. Victimization by fraud or scam
Retirees: 6%
Retired widows: 5%
Men: 5%
Women: 7%
Age 45-59: 11%
Age 60-69: 5%
Age 70-80: 5%
Household income less than $35,000: 8%
Household income $35,000 – $74,000: 5%
Household income greater than $75,000: 4%
11. Loss in total value of savings of 10% or more due to poor investment decisions
Retirees: 9%
Retired widows: 8%
Men: 12%
Women: 7%
Age 45-59: 16%
Age 60-69: 9%
Age 70-80: 8%
Household income less than $35,000: 11%
Household income $35,000 – $74,000: 9%
Household income greater than $75,000: 7%
10. Death of a spouse or long-term partner
Retirees: 10%
Retired widows: 56%
Men: 5%
Women: 14%
Age 45-59: 4%
Age 60-69: 6%
Age 70-80: 16%
Household income less than $35,000: 15%
Household income $35,000 – $74,000: 7%
Household income greater than $75,000: 5%
9. Family emergency that impacted the amount able to spend on other things or used 10% or more of savings
Retirees: 12%
Retired widows: 18%
Men: 11%
Women: 13%
Age 45-59: 20%
Age 60-69: 11%
Age 70-80: 11%
