Why might unexpected expenses be particularly concerning for retirees?

Unexpected expenses can be particularly concerning for retirees primarily because they may not have the ability to increase their income. Unlike working individuals who can take on additional shifts, seek promotions, or switch jobs to improve their financial situation, retirees typically rely on fixed sources of income such as pensions, Social Security, or withdrawals from retirement savings. This fixed income means that any unexpected expenses—like medical bills, home repairs, or other emergencies—can significantly impact their financial stability, as they lack the ability to augment their income in response to these financial shocks.

Furthermore, retirees often have a finite amount of savings, and large unforeseen expenses could deplete their retirement funds more quickly than anticipated, leading to financial distress over time. This inability to adapt their income in response to rising costs or emergencies makes financial planning and budgeting crucial for those in retirement.