In order to navigate successfully throughout your retirement, it’s critical to understand the seven basic risks you will face. There are actually a lot more than seven, but these are the ones we see most often. Knowing how to eliminate or minimize these and their impact is the key to enjoying the kind of worry-free retirement you’ve worked a lifetime to achieve. These seven retirement risks include;
1. Longevity Risk2. Market Risk3. Sequence Of Returns Risk4. Tax Risk5. Interest Rate Risk6. Inflation Risk7. Long Term Care Risk
1. Longevity Risk - “The risk of outliving your money.” It's no secret that people are living longer than ever before. Avoiding this risk involves creating a guaranteed lifetime income for both you and your spouse that can increase with inflation but will never decrease due to a stock market crash.
2. Market Risk - “The risk of losing significant assets due to a stock market crash.” Investing successfully means focusing first on risk rather than return. When you’re invested more in line with your personal risk tolerance, your retirement income goals can be achieved more easily with less cost and greater peace of mind.
3. Sequence Of Returns Risk - “The ‘silent killer’ of retirement plans.” How much money you take out of your nest egg, and when you take it, is just as important as how much you earn on your money. Different investment strategies are needed during the withdrawal phase of your life than during the accumulation phase. Use strategies which can help protect your nest egg and provide the income you need throughout retirement regardless of market performance.
4. Tax Risk - “The risk of losing money due to unnecessary taxation.” Most people are overpaying their income taxes just because they don’t know any better. Proven strategies exist which can reduce or even eliminate both income and estate taxes, improving your investment returns, lifetime income, and overall asset growth.
5. Interest Rate Risk - “The risk of losing asset value as interest rates change.” Interest rates can have a dramatic effect on your asset values, growth and income. A good plan includes contingencies to safely grow your money regardless of changes in interest rates.
6. Inflation Risk - “The need for greater income tomorrow to sustain a lifestyle you enjoy today.” Long term inflation can slowly rob you of your wealth. One key is to maintain, or even increase, your purchasing power to help offset inflation throughout retirement.
7. Long Term Care Risk - “The risk of depleting assets due to a need for extended care.” One of the biggest risks we all face during retirement is the potential need for long-term care. Protect your assets from potentially devastating long-term care expenses by using the latest asset protection strategies specifically designed for this uncertainty. For those fortunate enough never to need care, unused funds previously allocated can be redirected for the benefit of yourself or other family members.
How many of those seven risks are you concerned about? What steps have you taken to avoid them, if any? We want to help you enjoy a worry-free retirement and that begins with eliminating the obstacles and a good place to start, is with these risks. Most of them are preventable with the right type of planning. Call our office now at 760-752-7848, email us here, or click on this calendar link to schedule a 10-15 minute "Get Acquainted" phone call so we can learn a little more about your situation and see how we might best be of service to you.