Fixing a Broken Retirement Plan

You and your spouse are fully employed and making a nice income. You started your own consulting business a couple years ago that is now profitable. Your spouse works for a large company that offers great benefits, including full health insurance coverage for the family. Your son, the senior star quarterback of the high school football team, is being courted by colleges. You expect a full-ride scholarship will cover his college expenses. Both sets of parents are retired, seem happy and financially secure.

You have saved and invested on schedule for retirement. You have some funds set aside for college for your daughter, who is just starting high school. Your mortgage and car payments are manageable, and a family vacation for the summer is all planned.

That was last week.

This week, your mother calls with news that your father has Alzheimer’s and will need to be placed in memory care. They do not have long-term care insurance. They have a nice home but have been barely making ends meet with their Social Security benefits and small pension. They never wanted you to worry so always pretended they were doing fine.

On top of that, your son was in a biking accident and, though he will recover, his throwing arm is permanently damaged. The football scholarship is now out the window.

To add to your stress, your spouse’s employer is closing its office and moving all employees to Houston. With your business just taking off, moving out of town is not feasible. Plus, you counted on your spouse’s job to pay for health insurance and other benefits.

Life takes twists and turns. The best laid plans can be upset by circumstances beyond your control. Loss of employment and family health issues can set you back and require a substantial adjustment to your future retirement plans because current financial needs take priority.

While this triple whammy may seem insurmountable, oftentimes when one door closes, another opens with opportunities you may have never considered. If your retirement plan seems broken, take charge of the situation and be flexible. Even though the answers may not be apparent at first, assessing your situation and reviewing your options can help ease your stress and get you back on track.

The first step is to document your situation in writing. Gather the facts such as your assets, debts, income and expenses. With your spouse’s job loss, your household income will diminish. Your expenses will increase to help out your parents and to pay for your son’s college.

You’ll have to make some difficult choices. Maybe your parents can sell their home to fund some of the long-term care costs and move close to you for support. Maybe you can dip into your daughter’s college fund for your son, and he can go to a local junior college for a couple years to save money.

Hopefully your spouse can find other full-time employment that provides benefits, even if the total compensation package is a step down from what he/she was earning. Dialing down your current lifestyle, possibly refinancing your home and planning to retire later than expected are all possibilities for getting your retirement plan back on track.

As you evaluate your situation, you may discover options that will make you just as happy. Be creative and brainstorm with your family and your financial advisor to consider all possible options. Analyze each one to determine the most practical solutions and if something doesn’t work out, try another approach. Broken retirement plans can be fixed.

This commentary originally appeared June 3 on

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Connie Brezik, CPA/PFS, CFP®

As a wealth advisor at Buckingham Strategic Wealth, Connie works with clients to form a comprehensive financial plan tailored to their individual circumstances, one that includes portfolio management, tax strategies, wealth transfer considerations, retirement analysis and education planning. She welcomes the chance to help clients work through difficult situations, finding solutions that they may not have thought of and guidance about what to do if their plans don't work out as anticipated.

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