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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.
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