Advisor Resources: BMO Wealth Institute

Life events that may derail a financial plan

Life events that may derail a financial plan

When polled after the 2012 election, most Americans were very concerned about their retirement and health care costs. Many Americans feel largely unprepared financially to deal with these events. In fact, nearly three-fourths agreed that they were worried about having enough money to retire and about being able to afford unexpected health care costs.1

Financial concerns of men and women

Significantly, according to the 2009 National Consumer Survey on Personal Finance 64% don’t have a written financial plan.2 However, just having a financial plan is not enough. One of the biggest mistakes individuals make is just having a plan that meets their goals without really stress testing that plan to make sure that it withstands not only a major decline in financial markets but against the major life events that keep Americans awake at night. The most significant derailments to a financial plan are the death or disability of a spouse, partner or family member and divorce, particularly later in life.

All of these major life events can have a dramatic effect on the family’s financial plan. These disruptions can result in a loss of income and lead to additional unplanned spending.

While the financial impact caused by derailments can be very hard, there are ways that families can plan for and insulate themselves from the worst of the financial impact. Taking a practical and proactive approach to these potential risks allows families to implement changes to their financial plan that can help put them in a more secure financial position going forward and provide some peace of mind.

For advisors:

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1 Retirement and Health Care Costs Weighing Heavy on Americans’ Minds, HarrisInteractive.com, November 5, 2012
2 “Two Thirds Don’t Have a Financial Plan”, Financialplanning.com, September 24, 2009.

BMO Global Asset Management does not offer tax advice. Contact your tax advisor.
This information cannot be used by any taxpayer for the purpose of avoiding tax penalties that may be imposed on the taxpayer. This information is being used to support the promotion or marketing of the planning strategies discussed herein. BMO Financial Group and its affiliates do not provide legal or tax advice to clients. You should review your particular circumstances with your independent legal and tax advisors.
Estate planning requires legal assistance which BMO Financial Group and its affiliates do not provide.
BMO Wealth Institute, a unit of BMO Financial Group, provides this commentary to clients for informational purposes only. The comments included in this document are general in nature and should not be construed as legal, tax or financial advice to any party. Particular investments or financial plans should be evaluated relative to each individual, and professional advice should be obtained with respect to any circumstance.

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