Tuesday, August 27, 2019

How to Deal with Sudden Emergency Expenses During Retirement

Retirement is often portrayed in entertainment and the media as a stress-free time to relax and focus on things like touring the United States or your hobbies. Rarely do they also portray the fact that retirement isn’t always free from financial problems and worries. 

For one, despite meticulous planning, sudden unplanned expenses can hit retirees hard. If this has been the case for you, below are some ways you can deal with unexpected emergency expenses during retirement.

Emergency Expense Funds

During retirement, you tend to rely on things like your pension, 401k, annuity, or Social Security income to provide you with a monthly salary. While this is all well and good, certain sudden significant expenses may still pop up from time to time that takes you well beyond your monthly budget

Overall, it’s a good idea to always have an emergency fund you can draw from to pay off such emergency expenses. This will prevent you from having to go into debt. Discuss the possibility with your bank or investment manager.

Bail Bonds

One sudden expense that can happen during retirement is needing to pay for bail. Most often, this is bail for your children or even grandchildren. However, suddenly coming up with bail to get your loved one released from jail can be difficult. 

Overall, it may be best to contact a 24-hour bail bonds agent to obtain a short term loan. You can use something physical like a TV or an old car as collateral. Just make sure your loved one actually shows up for court.

Insurance Coverage

One of the reasons people purchase insurance coverage is to be covered in case they do face a sudden huge expense. Insurance is a wide-ranging industry. Almost anything can be insured, and nearly any event can be insured against. 

However, you can also waste a lot of your monthly income paying for insurance you don’t need. If you use insurance to protect against sudden expenses, make sure the possibility of such expenses occurring is relatively likely.

Stock Liquidation

While it’s important to invest when creating a portfolio to provide you and your spouse with retirement income, you don’t need to hang on to all of your investments forever. If you have a sudden emergency expense you can’t pay for with your monthly income, you may want to look into liquidating some of your stocks and investments to get the funds you need. It’s probably a better choice than taking on debt or selling physical assets you don’t want to part with.

Overall, just because you’re retired does not mean you need to stop planning for financial issues. Sudden emergency expenses can hit at any time. They can also be bigger than what you can afford in your monthly budget. Make sure you have options to deal with such expenses as they occur.

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