Life Happens—Is Your Retirement Protected?

That washing machine you thought would last another five years just flooded your basement. Your daughter called asking for help with an unexpected medical bill. The roof is suddenly leaking after that last storm.

When these surprises hit during retirement, they don’t just drain your bank account—they threaten the financial freedom you’ve worked decades to build. Without the right backup plans, one major expense can force painful choices between paying bills or preserving your nest egg.

Here’s how to shield your retirement savings from life’s expensive surprises.

Build a Cash Reserve That Makes Sense for You

The standard advice about keeping three months of expenses saved might not cut it in retirement. Your emergency fund should match your actual life, not a textbook example.

If you have unpredictable healthcare needs or an older home that might need repairs, consider setting aside more. Keep this money in a high-yield savings account where you can reach it quickly without penalties.

After using your emergency money, have a clear plan to rebuild it—whether that means temporarily reducing other expenses or adjusting your investment withdrawals.

Create Multiple Income Streams

Even the best emergency fund won’t last forever. That’s why it’s crucial to have steady income sources beyond just Social Security.

• Annuities can provide a predictable monthly income to cover essential expenses.
  
• Dividend-paying stocks or bonds generate regular income while keeping your principal intact.
  
• Turning a hobby into occasional income (like consulting, tutoring, or selling handmade crafts) can help both your finances and your sense of purpose.
  

Prepare for Healthcare Surprises

Even with Medicare, an unexpected health issue can quickly become a financial emergency.

• If you still have a Health Savings Account (HSA) from before retirement, remember those funds can pay for Medicare premiums and out-of-pocket costs completely tax-free.
  
• Set up a separate medical emergency fund specifically for copays, medications, and unexpected procedures that Medicare might not fully cover.
  

Adjust Your Investment Approach

The investment strategy that built your wealth isn’t necessarily the one that will preserve it.

• Keep enough in stable, accessible investments (such as CDs or short-term bonds) to handle immediate needs without selling stocks during a market downturn.
  
• Develop a clear withdrawal strategy that balances income with long-term growth.
  
• Review your portfolio at least annually with a focus on protection, not just growth.
  

Strengthen Your Insurance Protection

The right insurance policies act like a moat around your retirement castle.

• Make sure your homeowner’s insurance actually covers today’s replacement costs, not what your house was worth years ago.
  
• Consider an umbrella policy that extends your liability coverage beyond standard limits—often for just a few hundred dollars annually.
  
• Check that your auto insurance still matches how and where you drive now, not when you were commuting to work.
  

Update Your Estate Plans Regularly

Without current estate documents, your financial safety net can unravel right when your family needs it most.

• Review beneficiary designations on every account to ensure they match your current wishes.
  
• Consider whether a trust might better protect your assets and provide for loved ones according to your specific instructions.
  
• Make sure someone you trust has financial power of attorney to handle money matters if you no longer can.
  

Get Ahead of the Next Financial Surprise

Financial surprises are inevitable—but they don’t have to wreck your retirement. Let’s make sure your financial safety net is ready before you need it.

Call Barb Swiatek at 719.597.2179 today for expert guidance on protecting your retirement from life’s unexpected expenses.