5 Common Retirement Risks to Plan For
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Originally Posted On: https://fortresscapadv.com/5-common-retirement-risks-to-plan-for/
In the US, the average age people retire is 64. Although retirement comes with many benefits that can improve your quality of life, it’s something you need to plan carefully.
There are many retirement risks that people tend to overlook. We’ve compiled a brief guide on the five most common retirement risk factors you should consider. Let’s get started.
Inflation is one of the most significant risks to consider when retirement planning. As time goes on, inflation causes money to have less value.
Those who withdraw a fixed amount of money from their retirement fund each year will have less spending power as they age. To protect against this, it’s essential to invest your money appropriately. As long as your returns are substantially greater than the annual inflation rate, you shouldn’t encounter issues.
2. Medical Expenses
Unfortunately, elderly individuals are more likely to deal with unexpected medical expenses. In some situations, these can prove to be costly, even with insurance coverage.
If you don’t anticipate this scenario, you might end up spending the majority of your retirement fund managing a medical condition. This is especially true with serious ailments like stroke, cancer, etc.
When creating your financial planning strategy, consider that healthcare costs tend to rise over time. This is true for virtually every type of treatment, including prescription drugs.
3. Market Volatility
Most people leverage the stock market to build their retirement fund. In many cases, this can be an amazing way to grow your wealth exponentially. There are times, though, when the market is volatile.
Without the right wealth management strategy in place, you risk losing everything. This is why portfolio diversification is so important. Although your gains won’t be as dramatic during market upswings, you’ll be protected from poor market performance.
Running out of money is a legitimate concern due to advances in medical care. Life expectancy continues to increase, making it more likely that retirees will live for decades after they stop working.
It’s best to overshoot your projected financial needs so you have extra funds to pull from if necessary. Common strategies include maxing out your IRA account and delaying your Social Security payments. To clarify, delaying your Social Security disbursement will increase your monthly payments and make it easier to handle your bills.
5. Death of a Spouse
It’s not uncommon for retirees to plan their financial future with their spouses. Complications can quickly arise after the death of a spouse, however.
Things can worsen if there are delays related to the deceased’s estate, life insurance policy, etc. Working with a financial planner can get you started on the right track.
Don’t Overlook These Retirement Risks
These retirement risks are more common than you think, and it’s essential that you keep them in mind when planning for your future. This will ensure that you can safeguard your wealth and establish a comfortable, stable lifestyle.
Reach out to a representative today at Fortress Capital Advisors. Our team of financial professionals can assess your needs and ensure that you protect your assets.
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