Make smart, careful moves to cover unexpected expenses in retirement.
LIFE EVENTS LIKE A natural disaster, health crisis or expensive home repair have one factor in common: They come when you least expect them. Most Americans (55 percent) worry about what they would do when faced with a financial emergency, according to the 2018 Northwestern Mutual Planning & Progress Study. And stress levels only increase if you are on a fixed income. “Unexpected and uncovered emergencies can literally ruin a retirement plan,” says Nahum Daniels, a wealth advisor in Stamford, Connecticut.
If you’re retired and facing a financial emergency, here are some of the best approaches to gather funds, cover the costs and move forward without going into debt.
Tap easy-to-access funds. If you have an emergency fund, now is the time to use it. When gathering additional sources of cash, check for accounts that are simple to access and won’t have a hefty tax impact. “If you have money in a savings account at the bank, start withdrawing from that before you tap your IRA,” Daniels says.
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