Ric Edelman: Ready for These Retirement Shocks?

Ric Edelman: Ready for These Retirement Shocks?

Millions of retirees didn’t anticipate these events, but you can.

Reviewed by: Sean Allocca
Edited by: Lisa Barr

Ric Edelman: It's Friday, August 11. Today's show is about how to choose the right financial advisor for you. Some 48% of retirees say they’ve experienced more surprises and challenges than they expected and that they’ve significantly disrupted their retirement well-being.

What are these surprises and challenges? Most commonly, having a family member or close friend die. About 42% say they've had this happen to them. And 77% of them say it was an extremely disruptive event.

Also, 30% have experienced personal health issues, with half saying it was extremely disruptive. And 21% incurred having a spouse or partner having health issues. This 41% say it was extremely disruptive, and 56% of women say they've had to adjust their lifestyle in retirement because of their spouse’s or partner's health issues. Additionally, 20% have experienced a significant financial setback.

Because of inflation, the cost of living, medical, dental expenses, unexpected home repairs, decline in the value of investments, the need to provide financial assistance to family members or friends, 75% of retirees say they've had to reduce their own everyday spending.

And finally, unexpected retirement has been a surprise, with 30% of retirees saying they retired sooner than they anticipated. They suffered unexpected health issues or they got laid off at work in a downsizing. Or they've had to incur family responsibilities such as caregiving for someone else—all of that translating into them retiring sooner.

Retirement May Require Accelerated Planning

That has had a big impact not only on their lifestyle, but their finances. In fact, the number of people who had to take hardship withdrawals from their 401(k) rose 33% over the past year. The average withdrawal has been over $5,100.

So as you prepare for retirement, do you need to accelerate those plans? I'm not saying you should retire sooner, I'm saying you need to assume you might have to, and that it might be because of reasons that give you a significant disruptive event. Talk about it with a financial advisor.

If you’re a financial advisor, talk about this with your clients who are facing retirement. Do they recognize the risks associated with having family members pass away, incurring medical issues themselves or their spouses’ financial setbacks or unexpected retirement because of job loss or family issues? Now's the time to prepare before you experience any of this.

To read the full transcript, click here.

Ric Edelman, founder, Digital Assets Council of Financial Professionals, is one of the most influential people in the financial planning and investment management profession, according to Investment Advisor, RIABiz and InvestmentNews. He was ranked three times as the nation’s No. 1 Independent financial advisor by Barron’s, is in two industry Halls of Fame and received the IARFC’s Lifetime Achievement Award. Edelman also holds two patents for financial product innovation. He is the industry’s top financial educator. Edelman is a #1 New York Times bestselling author of 12 books on personal finance, including his newest, The Truth About Crypto, an Amazon bestseller. He hosts The Truth About Your Future podcast and produces Public Television specials. Edelman taught personal finance at Georgetown University for nine years and is Distinguished Lecturer at Rowan University. He and his wife Jean live in Northern Virginia.