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 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.
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“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, 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%).
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