We always recommend early, regular, and consistent financial planning for retirement. Solid preparation is certainly the key to (mostly) avoiding many unpleasant surprises in life. Having said that, what type of events should be anticipate in retirement, and how do you prepare for them? The following are some of the more common retirement risks.
Market fluctuations. We all know that nothing is guaranteed, when it comes to the stock market. But, generally speaking, we know that some investments tend to be more risky than others. When you’re young and ambitious, you might feel comfortable taking some risks, but not so much when you’re nearing retirement. At this time most people begin to value stability and security more than ever. As you near retirement, it’s time to reevaluate your portfolio, and possibly rebalance it to address your new risk tolerance. You might also continue to rebalance throughout your retirement years.
Inflation. You expect that your retirement income will cover your expenses, but how roomy will that same income feel in twenty years? Most of us don’t notice inflation much from one year to the next, but over the course of a few decades it will certainly impact your purchasing power. That’s why many retirees create an income plan that keeps pace with inflation.
Healthcare needs. We’re all more likely to experience greater healthcare needs in our sixties and beyond. And, as you might know, the rising cost of healthcare continues to outpace inflation each year. HealthView services estimates that the average 65-year-old couple who retires today will spend $266,000 on medical expenses over the course of their retirement years!
Long-term nursing care is another consideration. Can you foot that bill for a facility that might range from $3,628 to $7,698? Luckily, there are many insurance options to help with this expense, but you need to take advantage of them before a medical event occurs.
As financial planners, we are well acquainted with these risk factors, as well as others that might occur during retirement. Meet up with us to discuss them, and we can show you ways to address your specific concerns.