What happens if you lose a job in your 30’s, 40’s, or 50’s? Doing so could impact your life significantly, it turns out. If you have multiple events, or income shocks, over the course of the critical years for your retirement savings, you could be facing challenges down the line.

Many individuals may suffer an event over the course of their life that could cause them to dip into their retirement savings account. Furthermore, major financial setbacks can generate challenges that can decrease the amount of money you’re contributing towards your retirement account. 

Up to 96% of Americans will experience at least 4 income shocks or a 10% or greater decrease in their pay as a result of something like a job loss, job change or poor health. This is shared by a study conducted by the New School for Social Research. Individually, these minor income shocks will not significantly impact your overall retirement savings.

One setback, for example, could lead to as little as $1000 less savings in retirement. However, multiple income shocks can really add up. 4 or more 10% income decreases can drop your retirement savings by $10,000.

In conjunction, having poor health can also significantly decrease your nest egg value. Poor health reduces it by more than $86,000 and less than outstanding health reduce the retirement savings by about $34,000.

Consulting with an experienced estate planning attorney about your retirement planning goals is strongly recommended if you find yourself in this situation. Looking ahead to the future is one way to minimize the potential impacts.