Retirement Surprises You Won't See Coming

So you've done all you are supposed to do as far as your retirement goes, and when you go to retire it should be smooth sailing. However, many retirees encounter unexpected costs that they didn't plan for. This is why it is so important to meet with a retirement advisor, create a plan, and stick to it. Some Canadians decide to retire early, not thinking about the possibility that family members may return who need a place to live, or that they weren't able to pay off their mortgage and still have to make their monthly payment.

Reasons why people couldn't retire like they planned and how to avoid these surprises now:

Had to retire early due to a health issue. A heart attack or a bad back or hip can force people into early retirement. It doesn't even have to happen to you...it could happen to a spouse and have the same devastating effect. There are a number of health reasons that could keep someone from continuing to work. Don't rely on disability from the government to cover all your expenses. Make sure you are paying into a RRSP or other investment from an early age so that unexpected illnesses won't keep you from the retirement you deserve.

Was asked or incented to take an early retirement by employer It happens

Employers decide to downsize and often the older workers are let go first. You can work for a company all your life and it will still all come down to the bottom line. Don't hope for sentimentality from your boss. Before you accept that early retirement plan, make sure it's truly the best deal for you. Consult a retirement advisor about the company's offer and let them crunch the numbers.

Still had unsecured debt

If you are not aware of your credit card balances, you just might carry that debt into your retirement where you weren't counting on it still being an expense. It might not have even been a frivolous vacation or an out-of-control spending habit. It's just the longer you have credit, the more the credit companies will throw at you, so it is best to pay off your balances every month as often as you can.

Still owed on a house and/or investment properties

Again, retirement can sneak up on you or be forced upon you. When investing in property or managing the mortgage on your primary residence, keep this in mind. A 2nd mortgage might sound fine to pay for an elaborate vacation or to fund a grandkid's wedding, but you will have to pay it back eventually.

Still owed on vehicles

A common mistake retirees are guilty of is keeping too many cars. With work, taking the kids to school, traveling, etc., there was a time that you needed 2 or 3 cars. As you approach retirement, however, take a hard look at what you actually need when it comes to transportation. If you weren't planning for a car payment in your retirement budget, get rid of it.

Spent more money before retiring or after retiring than should have

People get excited at the prospect of not having to go to work anymore. They see a healthy sum of money in their retirement portfolio and decide they've earned a little fun. New cars, expensive vacations, purchasing vacation homes, etc. all will hit your retirement money in a big way. Stick to your retirement plan so your retirement can work for you.

Wasn't expecting to house and feed returning children/grandchildren or sick and aging parent

It can happen so unexpectedly. A son loses his home, a mother falls and breaks her hip, a relative can no longer fund their retirement and you are there to take them all in. You budgeted for you and your spouse, however, and not several mouths to feed and house.

Keep your retirement working for you as long as you can by carefully considering any possible surprises that could come your way. You never know what life will throw at you!