While Americans think they are planning for retirement, they may not be preparing for the unexpected events that could interfere with their plans, according to a new study from the MetLife Mature Market Institute. Such oversights may cost them, but for many it is not too late to make the necessary changes.
"Best-Case Strategies for a Flexible Retirement: The MetLife Study of Thinking About Retirement in Uncertain Times,"classifies the various types of retirement planners and gives examples of the most successful among them — the "Preemptive Planners." Preemptive Planners are those who are prepared for the unanticipated scenarios that may come their way, like having to retire early because of health issues or the loss of a job, retiring late for financial reasons and other factors like tenuous health care coverage, long-term care costs, vanishing defined-benefit plans and the vagaries of the stock market. Unexpected expenses for health care, housing, family support or other emergencies, according to the data, can be a one-time or ongoing expense for six months or longer. They can cost anywhere from $6,700 to $8,300 for each occurrence.
Produced in conjunction with the Scripps Gerontology Center at Miami University, the survey was based on personal interviews with 50 pre- and post-retiree couples and individuals ages 50-70.
"We found that actively preparing for the surprises that inevitably come our way is the most successful approach to retirement," Sandra Timmermann, Ed.D., director of the Institute, said in a statement. "Knowing you will have guaranteed income sources available and access to emergency funds is key. To maximize income in retirement while maintaining liquidity, consider options beyond low-yielding savings accounts. Some annuity and home equity products enable you to have access to cash while optimizing returns at the same time. Ultimately, the capacity to withstand the unexpected is dependent on the ability of people to imagine, anticipate and prepare for the circumstances that are often beyond their control."