June 4, 2026
Steps you can take to help make sure unexpected events don't interfere with your long-term plans
It's impossible to eliminate all risk from our lives, financial or otherwise. We can't control whether markets go up or down. A divorce, serious illness — or even a large, unexpected bill — could create a financial shortfall that throws your careful plans off track. "A number of life events can impact income or savings and threaten an individual's or family's financial well-being," says Lauren Sanfilippo, senior investment strategist in the Chief Investment Office for Merrill and Bank of America Private Bank.
While you can't prevent these scenarios, you have options for helping preserve your finances from most of them, says Rachel Scholl, managing director, Merrill Lending Sales Executive, Bank of America. Here's how you might prepare for some of the most common — and risky — what-ifs.
What if you have a sudden need for cash?
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What if you have a sudden need for cash?
The risk:
35%
Percentage of consumers who said they made an emergency purchase of at least $250 in the past year
What if you have a sudden need for cash?
The potential cost:
$838
The average amount consumers spend on a car repair, one of the most common unexpected expenses
Sources: PYMTS, "35% of Consumers Regularly Face Hundreds in Unplanned Expenses," June, 24, 2025; Kelley Blue Book, "Here's How Much the Average Car Repair Now Costs," March 13, 2025.
What if you have a sudden need for cash?
What to know:
Unexpected bills crop up all the time, and the amount due could exceed the cash you have on hand. One recent survey found that the median cost of an emergency expense is $605.Footnote 1 And as any homeowner knows, homeownership can lead to potential headaches. A leaky roof, a broken furnace or a plumbing mishap can put your budget in disarray. "We never want to be in a situation where we have to take steps such as liquidating assets at an undesirable time in the market or running up credit card debt to pay bills," says Scholl.
Ways to prepare: Maintaining a sufficient emergency fund is key, notes Scholl. Review several months' worth of recent expenses alongside your
monthly budget (PDF) to identify ways to save money for an emergency. Consider working with an advisor to determine how much cash you should have readily available and what type of account to keep it in, such as a savings or money market account.
For unexpected home repairs, a source of funding may be your home itself, says Scholl. A home equity line of credit, for example, may carry a lower interest rate than what you'll pay on credit cards or personal loans. But keep in mind that if your loan has an adjustable rate, your payments could rise (and fall) over time, and if you don't pay back what you owe, your house could be at risk of foreclosure.
What if you're faced with major medical expenses?
What if you're faced with major medical expenses?: Slide 1 of 3
What if you're faced with major medical expenses?: Slide 2 of 3
What if you're faced with major medical expenses?: Slide 3 of 3
What if you're faced with major medical expenses?
The risk:
23%
Percentage of adults who experienced a major unexpected medical expense in the past year
What if you're faced with major medical expenses?
The potential cost:
$1,000- $1,999
The median cost of unexpected medical bills in 2024
Source: Board of Governors of the Federal Reserve System, "Economic Well-Being of U.S. Households in 2024," May 2025.
What if you're faced with major medical expenses?
What to know:
Unplanned medical expenses can be a big blow to your finances. For some, it can lead to cashflow problems — 30% of Americans with a household income of $90,000-plus say they or a family member living with them had problems paying for healthcare.Footnote 2 After retirement, the costs can be even steeper. A nursing home stay could cost more than $114,000 per year, and hiring a home health aide for roughly six hours per day could cost more than $6,000 per month.Footnote 3 "Seven out of 10 Americans turning 65 today will have some health event for which long-term care is necessary (footnote 4), and the cost can decimate savings," says Mike O'Malley, co-head of insurance, Investment Solutions & Personal Retirement at Bank of America.
Ways to prepare: Check if your employer offers a flexible spending account (FSA) or a
health savings account (HSA); both are tax-advantaged accounts that allow you to pay for healthcare expenses with pre-tax funds. The HSA — available only for those with high-deductible health plans — can be particularly valuable because unused funds carry over year to year and earnings keep growing tax-free, allowing you to tap the account tax-free for medical expenses when you most need the money, even in retirement.
Consider a long-term care insurance policy to help preserve your wealth and that of your children, who often shoulder the costs of caring for aging parents.
What if you lose your job?
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What if you lose your job?: Slide 2 of 3
What if you lose your job?: Slide 3 of 3
What if you lose your job?
The risk:
26%
Percentage who say a change in income or employment status is causing them to save less
What if you lose your job?
The potential cost:
24
weeks
The average duration of unemployment in April 2026
Sources: Bankrate, "2026 Annual Emergency Savings Report," February 4, 2026; U.S. Bureau of Labor Statistics, "Unemployed persons by duration of unemployment," accessed May 8, 2026. Data is seasonally adjusted.
What if you lose your job?
What to know:
Not only can an unexpected job loss affect your future earnings potential, but it can also deplete your savings and threaten your short- and long-term financial goals.
Ways to prepare: Make sure you have enough funds to last at least six months to give you time to
find a new job. Build up savings accounts and other liquid investments such as money market funds, which you can tap into for extra cash.
Keep in mind that if you rely on an employer-sponsored healthcare plan, you'll also have to come up with a strategy to maintain insurance coverage. You may be able to join a partner's plan, pay to continue with your former employer's group plan for up to 18 months under COBRA or shop
Go to third-party website healthcare.gov popup or your state's health insurance exchange, if it has one.
What if there's a divorce?
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What if there's a divorce?: Slide 2 of 3
What if there's a divorce?: Slide 3 of 3
What if there's a divorce?
The risk:
40%
Percentage of people who have gone through at least one divorce by age 55
What if there's a divorce?
The potential cost:
45%
The decline in the standard of living after divorce for women over 50 versus 21% for men
Sources: U.S. Bureau of Labor Statistics, "Patterns of marriage and divorce from ages 15 to 55," September 2024; I-Fen Lin and Susan Brown, "The Economic Consequences of Gray Divorce for Women and Men," The Journals of Gerontology Series B, December 2021.
What if there's a divorce?
What to know:
Nobody wants to think about — let alone plan for — a dramatic change in their household's income from divorce. Yet the rate of dissolved marriages among those 50 and over has risen since the 1990s,Footnote 5 forcing many to adjust to a single income as they near retirement.
Ways to prepare: In the event of a marital split, be aware that the laws governing the
division of property in a divorce vary from state to state. Keeping an up-to-date inventory of your household assets and debts can help you divide them equitably. In advance of remarrying, consider
setting up a trust to help protect your family. With a trust, you can ensure children from a prior marriage are not overlooked as the eventual beneficiaries of your estate while also providing lifetime support to a surviving spouse.
What if you experience an unexpected loss of income?
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What if you experience an unexpected loss of income?: Slide 2 of 3
What if you experience an unexpected loss of income?: Slide 3 of 3
What if you experience an unexpected loss of income?
The risk:
24%
Percentage of workers who turned 20 in 2025 projected to develop a disability before they retire
What if you experience an unexpected loss of income?
The potential cost:
15%-70%
Range of lost earnings for households with disabilities
Sources: Social Security Administration, "Disability and death probability tables for insured workers who attain age 20 in 2025," September 2025; Board of Governors of the Federal Reserve System, "The Hidden Costs of Disability," January 10, 2025.
What if you experience an unexpected loss of income?
What to know:
Some of us will be forced to leave a job early due to an illness, accident or other debilitating event, and the odds increase with age. The chances of having to stop working due to disability rise with age — a 50-year-old is more than twice as likely to need Social Security Disability Insurance as a 40-year-old is.Footnote 6 Others will have to adjust to the loss of income that comes with the death of a loved one. Given the high stakes involved, planning for these risks can be crucial.
Ways to prepare: When it comes to disability, insurance can be a crucial consideration. Find out whether your employer offers long-term disability income insurance and assess whether this benefit provides enough income protection. If not, consider purchasing your own policy to replace at least a portion of your income. And the death benefit from a life insurance policy can help to keep your family solvent should you or your spouse die prematurely.
What if there's a bear market?
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What if there's a bear market?
The risk:
15
The number of bear markets in the S&P 500 since 1945, averaging one every 5.1 years
What if there's a bear market?
The potential cost:
35%
The average decline of the S&P 500 in a bear market since 1928
Source: Bankrate, "Investing in a bear market 2025," April 11, 2025.
What if there's a bear market?
What to know:
It's hard to watch your savings shrink at any age. But bear markets may be the riskiest for investors who need to start withdrawing from their savings soon, perhaps to pay for college tuition or to fund retirement.
Ways to prepare: First, make sure your investment portfolio is well diversified. This means increasing
diversification across asset classes, within asset classes and across geographies. "A wider breadth of investments may provide an expanded opportunity set while potentially minimizing losses to your overall portfolio and wealth," says Sanfilippo.
"It's important to take the time to review investments regularly and adjust according to your time horizon," she adds. For instance, a college savings portfolio may be invested for maximum growth when college is 18 years away, but it may be better off in all cash when college is imminent to help reduce the risk of losing money due to a market drop.
No one can anticipate every event that life throws our way. Work with an advisor, if you have one, to address any number of risks that can potentially threaten your financial security, says Scholl. Together, you can put plans in place to help prepare for nearly any eventuality.
Footnote 1 PYMNTS, "35% of Consumers Regularly Face Hundreds in Unplanned Expenses," June 24, 2025.
Footnote 2 KFF, "Americans' Challenges with Health Care Costs," April 30, 2026.
Footnote 3 Genworth and CareScout, "Cost of Care Survey 2025," March 2026.
Footnote 4 U.S. Department of Health and Human Services, "How Much Care Will You Need?" accessed February 2026.
Footnote 5 National Center for Family and Marriage Research, "Age Variation in the Refined Divorce Rate, 1990 & 2023," 2025.
Footnote 6 Center on Budget and Policy Priorities, "Chart Book: Social Security Disability Insurance," updated February 28, 2025.
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