Preparing for a Financial Emergency


Nothing can derail your retirement like dealing with a financial emergency that depletes your hard-earned savings. Your retirement income plan should include dealing with unexpected expenses. In this blog, we will discuss ways to ensure that these emergencies won’t interfere with retirement life.

Have a Solid Income Plan

The easiest way to deal with a financial emergency is to have steady income. A diversified income strategy that balances social security and pensions with your investment portfolio and fixed annuities will allow you to have a steady stream of cash to cover expenses. Knowing the amount you have to live on will go a long way toward managing unexpected financial issues. Maximizing your additional liquid savings in cash accounts (checking, savings, money market accounts) is important. These values won’t fluctuate with market changes and you won’t be penalized for withdrawing from them. You can use these additional savings as your emergency fund.

Make a Budget

You should know exactly how much money you have coming in and going out each month so you’ll know how much money you need for your emergency fund. Maintaining a budget will make sure you are living below your means without overextending yourself. A budget is a useful tool for managing your money and knowing where you stand financially. Keeping a budget will also allow you to cut unnecessary expenses if there are emergencies. This will help you manage your cash flow if money gets tight.

Pay Down Your Credit Card Debt

If you have credit card debt, the interest charges you’re paying every month probably take up a significant portion of your monthly budget. Pay down your credit card debt to reduce your monthly expenses so you don’t have to touch your nest egg. Reducing these monthly payments allows you to use your money in a better way – like building an emergency fund.

Keep Up With Routine Maintenance

Keep your car, home, and physical health in good condition. Fixing problems while they’re small will help you avoid expensive repairs and unexpected medical bills. You might think you don’t have the time or money to deal with these things now, but they can create large financial problems down the road. It’s better to replace a few pieces of wood on your house than to put a new roof on later and simple things like filling a cavity now could mean not paying for extensive dental work in the future.

Retirement income planning should include planning for emergencies.  Life can be unpredictable, so it helps to be prepared. Preparation means you can live your retirement without worrying about financial setback. At Blue Waters Financial Group, we are committed to helping our clients achieve all their retirement goals and plan for the future. To schedule your no-obligation meeting and discuss your retirement income plan, just click on the link below or call us today at 704-790-2583 (BLUE).

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