As those in the workforce look towards retirement they are consumed with a plethora of emotions. It’s appealing to fantasize that one’s biggest expense on the horizon will be three idyllic winter months spent in Scottsdale or the cruising the Danube river in Europe each year.

It’s true that many retirees, faced with the gift of ‘free’ time, do find themselves happily investing their savings into a new set of golf clubs, an RV, a timeshare, etc. However, before you expend your hard-saved money on such big-ticket purchases, make sure that the fundamentals in your budget are covered. In other words, you need to plan for not only your current expenses, but for unforeseen expenses that can pop up.

According to a 2015 study by the Society of Actuaries, nearly a third of American retirees reported that they faced at least one unforeseen expense in retirement. When forecasting retirement expenses, it’s standard practice to try to ascertain whether or not your savings will cover your “normal” future expenses — keeping in mind, of course, that it’s impossible to predict how long one will actually live. However, beyond these accounting basics, here are three top potential financial catastrophes that could affect your retirement planning. 

Divorce

While divorce is an emotional whammy for all age groups, it can hit retirees especially hard. Assuming that neither person plans to work a part-time job during retirement, they face a hardship that younger couples don’t: the lack of a paycheck and any benefits that go along with active employment.

Among the Society of Actuaries survey respondents, 3% of retirees faced a divorce for which –– unsurprisingly –– they had not planned. While the phrase gray divorce sounds innocuous enough, the reality is usually anything but. In fact, financial planners and estate planners often recommend prenuptial agreements for remarriages, which are statistically likelier to fail than first marriages.

While prenups are potentially controversial terrain, it’s essential that seniors realize in the event of a second or third marriage their retirement accounts could be split in half a second or third time, thus leaving them only a fraction of their original investment. And if there’s anything less romantic than a prenuptial agreement, it’s spending your retirement in relative poverty. 

Loss to Value of Savings

Just as the house always wins in Las Vegas, the rule with retirement savings is that not everyone gets out what they put in — especially for those who sink their money into higher-risk investments. Yet even those who played it safe can find that fluctuations of the market can wreak havoc even on conservative products.

A Family Emergency

12% of retires in the survey reported confronting an unexpected family emergency that required a significant amount of their savings to cover. That’s why it’s crucial to budget for expenditures you can’t predict, rather than simply for your day-to-day budget. It could be a health emergency for you or your spouse, a child, or even grandchild.

The Bottom Line

If these retirement expenses come as a surprise to you – you’re in good company. Our advice is that It’s better to be prepared than sorry.