You may have done everything “right” heading into retirement – planned your income, managed expenses, maybe even continued to save. But what happens when the unexpected shows up?
Flexibility is one of the most overlooked aspects of retirement planning. Here’s how to build it into your strategy:
1. Prepare for the Unknown
Unexpected expenses, whether from the market, your health, or your home, can throw a wrench into even the best-laid plans. Having access to multiple sources of funds can help you avoid making rushed or costly decisions.
2. Use Home Equity Proactively
A Home Equity Line of Credit (HELOC) on a mortgage-free home can serve as a flexible resource in retirement. Whether you’re bridging the gap for home repairs or moving into a retirement community before your home sells, a HELOC can buy you time and options if it’s set up in advance.
3. Plan for Taxes You Can’t Predict
Tax laws change. And over a retirement that could last 20–30 years, those changes can impact your bottom line. Diversifying where you save (pre-tax, Roth, after-tax) gives you more choices when it comes time to take money out.
4. Learn from Hypothetical Scenarios
The comparison of two savers, Solo and Trio, can be a powerful lesson about flexibility. They saved the same amount, but one had all their money in a 401(k), while the other split it across different account types. When faced with a $24,000 dental bill, Trio had multiple withdrawal options with different tax consequences. Solo didn’t.
Being Smart About Money™ means planning not just for the likely, but for the unknown. Because retirement isn’t just about numbers. It’s about your real life.
Financial Planning Doesn’t Have to Be a Big Deal.
Any opinions are those of Traci Richmond and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional. Investing involves risk and you may incur a profit or loss regardless of strategy selected, including diversification and asset allocation. Prior to making an investment decision, please consult with your financial advisor about your individual situation.
