My eBanc

Many people plan their savings around their own retirement, but they do not think much about what else they may want to save for. This can mean that they end up with serious and significant problems in the future, mostly because they don’t have enough money for the issues that arise. Two of these issues are emergencies and parental care. Both are problematic when they aren’t planned for. It can be difficult to plan for these conditions because there is a lot of uncertainty involved, but there are still ways to protect yourself and reduce the risks to your financial future that can come about when parents need care or emergencies arise.

What kinds of emergencies are realistic?

All kinds of emergencies can happen, but some of them are much more realistic than others. By taking a look at the most common and likely types of emergencies and their costs, you can formulate a plan to start saving for them. Car repairs, unexpected (yet still reasonable) medical bills, and home repairs when something breaks or wears out are the most commonly seen emergencies. The water heater could break on a Saturday afternoon, or the car may quit running during your Monday morning commute. These kinds of issues may not cost a lot of money, but they can be pricey and they can need fixing quickly. You need to be sure you have the money to correct these problems set aside.

Will both parents need care?

When it comes to parental care, there are a couple of ways you can protect yourself. Your parents should have good insurance, as well as long-term care policies. If they do, most of the costs of their care won’t fall to you. But you may still need to shoulder some of the burden. If they don’t have those types of policies and plans in place, you could end up being asked to pay significantly more to ensure that they are taken care of properly and safely. Of course, there are a number of options and questions to ask yourself, including your parents’ ages now, how well they are caring for themselves, if they have health problems, and what kinds of provisions they have in place for later years.

Are some investments better for these issues?

If you are concerned about emergencies and parental care, you will want investments that have low or no penalties for removing money. You never know when an emergency can come up or when you may need to start caring for a parent. Because there is so much unknown information in both of these scenarios, money that you cannot access quickly, efficiently and without penalty is not really going to help you very much. Instead, focus on having the money for these concerns in an investment vehicle you can get to, so you can be ready for nearly anything that life throws your way.

How soon should saving start?

Ideally, saving should be something that starts right away. You want to save everything you reasonably can for as long as you can, so you can have a good retirement. However, if you haven’t started saving yet, then the next best time would be right now. If you save now, you’ll be ready for later, and that can have a big impact on protecting your retirement finances as you age. A lot of people don’t think about how even small emergencies and little bits of money going out here and there can impact their retirement savings, but it really makes a difference that can generally be avoided with some careful planning for the future and the understanding that problems can and do arise.