You Can Never Be Sure About Your Future

By Daniella Rand

No one truly knows what the future holds. Anyone who tells you otherwise probably has something to sell.

We’re not flying blind, however. In our personal and professional lives, we can make educated guesses about the risks and opportunities we might face now and tomorrow. Using what we know about probability and the unique mix of factors that we bring to the table, we can at least begin to determine the likelihood that any particular scenario will come to pass.

Unfortunately, those scenarios aren’t always welcome. However unlikely in any individual case, the six situations described below cumulatively affect millions of American families, always with adverse financial consequences. How are you preparing yourself and your family, should the worst happen?


An Unexpected Medical Expense or Disability

Serious medical issues can and do affect otherwise healthy individuals. Sometimes, these issues are more or less discrete — perhaps a short hospital stay followed by a period of rehabilitation and a resumption of more or less normal activity. Even that relatively upbeat scenario may bring overwhelming financial strain.

Extended periods of illness or disability can do even more long-term financial damage, especially when the afflicted individual is unable to work on a semi-permanent basis. Disability insurance can mitigate income loss, but it may not be enough to keep your financial plan on track.

An Extended Layoff That Threatens Your Long-Term Earning Power

A long period of unemployment can threaten your long-term earning power as well, especially if it lasts long enough to erode your skills and render you less than marketable. That could precipitate a vicious cycle of underemployment.

A Tragedy That Affects Your Family’s Finances

The premature death of a breadwinner is too awful for many to contemplate, but the downside risk is too great to ignore. Early in your career, your savings won’t be sufficient to replace this permanent loss of income; life insurance is a critical backstop.

Insolvent Entitlement Programs and/or Private Pensions

Forces beyond your control may conspire to sap your later-in-life income — namely, the looming insolvency crisis that many believe threatens Social Security and Medicare. If you’re relying on Social Security for the bulk of your retirement income, for instance, you may want to think about adjusting your long-term plans.

Health Problems That Force Early Retirement 

Even in the absence of an acute health crisis later in life, health problems could still sidetrack your career. Later in life, when your body is less resilient and your resume less attractive to prospective employers, even temporary health issues are deadly serious — in the worst case, effectively forcing you into retirement. 

Lengthy Long-Term Care Needs

Most people yearn for long life, but at what cost? If you require long-term care due to cognitive decline or infirmity, you’ll need to part with a huge chunk of your nest egg. Your erstwhile heirs may be hardest hit.

What Else Keeps You Up at Night?

As you look to the future, ask yourself: What else is keeping me up at night? And what can I do to prepare myself for these unpleasant eventualities? You might not have a crystal ball, but you do have the power to improve your financial resilience.