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5 Common Retirement Risks to Plan For

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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.

1. Inflation

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.

4. Longevity

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.

Legal Disclosure

This article is for informational purposes only and is not intended to provide, and should not be relied upon for investment, financial, legal, or tax advice. The content is general in nature and does not take into account your specific investment objectives, financial situation, or particular needs. Any information or opinions contained herein are not intended to constitute a solicitation or offer to buy or sell any securities or other financial instruments. Past performance is not indicative of future results.

The author of this article is a Registered Investment Advisor. However, this article does not constitute an offer to provide personal investment advice. The views expressed in this article are the author’s own and do not necessarily reflect the views of any advisory firm with which the author may be associated. It is crucial to consult with your own qualified financial advisor, tax advisor, or legal counsel before taking any action based on the information provided herein. Investing in financial instruments involves a high degree of risk and may not be suitable for all investors. Before making any investment decisions, prospective investors should carefully consider their investment objectives, level of experience, and risk appetite.

The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with investing in financial instruments and seek advice from an independent financial advisor if you have any doubts.

The author has taken reasonable precautions to ensure the accuracy of the information contained within this article. However, the author, advisors, agents, and any affiliated parties make no representations or warranties as to the accuracy, completeness, or suitability of this information for any purpose, and disclaim all liability for the use of this information for any purpose.

Nothing in this article should be considered a solicitation or offer to buy or sell any specific products or securities. Furthermore, this article should not be considered as an endorsement or recommendation of any companies, products, or services mentioned within.

Remember, investing in private placements and other similar investments involves significant risks, which include, but are not limited to, illiquidity, lack of dividends, loss of investment, and dilution, and it should only be done as part of a diversified portfolio. Your capital is at risk.

Always conduct your own due diligence before making investments.

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