This weekend in college football was a reminder that expectations do not determine outcomes. On Saturday, October 17, Alabama lost to Tennessee, Georgia lost to Auburn, Notre Dame lost to BYU, and Indiana fell to Ohio State. Even well-prepared teams can have a disappointing Saturday. What matters now is how they respond.

That same thought applies to retirement. A plan cannot prevent a market decline, an unexpected medical expense, or a change in your family’s circumstances. It can help you prepare for the financial consequences and decide what to do next.

Preparation gives you options

After a loss, a coaching staff still has useful work to do. There is film to review and preparation to adjust before the next game. The final score is settled, but the decisions that follow are still within the team’s control.

I would hope the teams that lost this weekend use that process to improve their chances through the rest of the season. There are no assurances about the next result. Preparation gives them a way to identify problems and make thoughtful adjustments.

Retirement planning deserves that same attention. Before an unexpected event occurs, you can consider where the money would come from, which expenses have flexibility, and what changes would deserve a closer look. Those conversations are easier to work through when you have time to weigh the choices.

Leave room for the unexpected

A retirement budget needs to account for more than a typical month. A major home repair or an uncovered medical bill can require money that was never part of the regular spending plan. A dedicated emergency reserve can help cover those expenses and reduce reliance on debt. The appropriate amount depends on your situation.

Consider a hypothetical retired couple whose roof needs a major repair during a market decline. If they have enough accessible cash set aside, they may be able to pay the bill without immediately selling investments or borrowing. The repair still costs money. Their reserve will need to be reviewed and replenished as circumstances allow. Preparation gives them another option.

Spending flexibility also deserves a realistic discussion. Housing, food, and healthcare may leave little room for cuts. A trip or another optional purchase may be easier to postpone. Knowing that distinction ahead of time can help you decide which changes would be manageable if circumstances require them.

Know what you would change

A useful planning conversation asks how your finances might respond if retirement starts earlier than expected, investment returns disappoint, or expenses rise. Looking at those possibilities can reveal where a plan is vulnerable and which adjustments might help. The results depend on the assumptions; they cannot predict every event.

Your investment mix belongs in that conversation, too. How soon will you need the money, and how much fluctuation can you reasonably tolerate? Diversification can help manage the risk of depending too heavily on a single investment, but it does not ensure a profit or protect against every market loss. Your investments should fit your circumstances and the role they play in your plan.

The goal is to give yourself a thoughtful starting point for decisions. When something changes, you can compare it with the possibilities you considered and assess whether your next step should change as well.

Keep the plan current

A retirement plan needs attention as life changes. A new health concern, a change in household income, or a need to help a family member can alter what you need from your money. Reviewing the plan gives you an opportunity to update the assumptions and make adjustments while choices remain available.

There may also be times when a review shows that a change is unnecessary. A troubling headline and a change in your household’s financial needs deserve different consideration. Having a plan gives that discussion a starting point beyond the emotion of the moment.

This weekend’s losing teams cannot undo Saturday. They can prepare for what comes next. We face a similar responsibility with our retirement: make the best decisions we can with the information and resources available, then revisit them when circumstances change.

At CochranMickels Retirement Specialists, we believe the plan comes before the investments. Preparing for the unexpected is part of that work. If you would like to discuss how your retirement plan accounts for surprises, we would welcome the conversation.

Want to learn more? Call us at 256-417-4870 or 407-220-1040.

YOUR Retirement on YOUR Terms.

About the author

Mike Mickels is the President and Chief Compliance Officer of CochranMickels Retirement Specialists, LLC, and an avid sporting clay competitor. Investment advisory services are offered through CochranMickels Retirement Specialists, LLC., a state-registered investment advisor firm domiciled in Alabama and also registered in Florida. Our firm provides personalized planning and investment services to individuals approaching and in retirement.

Disclaimer

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