Originally from our sister publication, Advisor.ca.
Very few Canadians with a financial plan have considered how events such as a disability, the death of a spouse or partner, or divorce could affect their lifestyle and financial situation, reveals a new report by the BMO Wealth Institute.
The study, The Biggest Life Events That Can Derail Your Financial Plan, notes that 84% of those polled believe they would face a major financial hit in the event of disability, while 75% say the death of a spouse or a separation/divorce would negatively impact their financial situation.
Close to 60% admit to be financially unprepared to deal with major life events such as retirement, declining health of a partner/spouse or the death of a partner/spouse.
“A financial plan can be very helpful in ensuring you are well prepared for life’s milestones such as buying a house, saving for a child’s education and retirement,” says Chris Buttigieg, senior manager, wealth planning strategy, with BMO Financial Group. “However, one of the biggest mistakes individuals make is not stress testing that plan against unforeseen events that can cause financial derailments. By working with a financial professional who understands the potential impact of life events such as job loss or disability, Canadians can develop a more practical and proactive plan that provides greater peace of mind.”
The report finds that men are more likely than women to worry about having enough money for retirement (33% versus 23%) and loss of employment (19% versus 13%), while women worry more about their health or the health of their partner/spouse (24% versus 21%).