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Among the Risks you face in Retirement:

  • Longevity risk
Outliving your assets.
  • Inflation

Decimates the purchasing power of retirees.

  • Rising Health Care Costs

Choosing proper medical coverage is a complex task.

Fidelity estimates that 65 year old couples retiring in 2013 will pay (on average) $220,000 in out-of-pocket medical costs during retirement.  How will you accommodate uninsured procedures, treatments, co-pays and prescription costs?  Click here to access AARP's Health Care Calculator.

  • Frailty/Physical or Mental Incapacity

Do you need Long Term Care Insurance and for how long?

How can proper planning help you maintain financial independence, keep your dignity and preserve a legacy?

How do you guard against elder abuse when you are most vulnerable?  Click here for resources from WISER Women.  This can be physical, mental or financial and is often perpetrated by a loved one.

  • Investment risks during the accumulation phase we define investment risk as volatility--in retirement it may be more appropriate to think of it as not having necessary cash flows in retirement.

Asset Allocation Risk:  Is your portfolio properly diversified?  Is it invested too conservatively or too aggressively?  Can you get the necessary portfolio returns to meet spending needs?

Market Risk:  Events that cause the prices of all securities to fall.

"Sequence of Returns" risk:  Once the distribution stage begins, the order in which good and bad market returns occur has a significant impact on how long your retirement assets last.

Reinvestment Risk:  The risk that interest rates have fallen when fixed income investments--forcing you to reinvest at a lower yield.

Liquidity Risk:  Inability to have assets available to meet unanticipated cash flow needs.

  •  Early death for you or a spouse

Mental, physical and psychological fallout.

Reduced Social Security and pension income.

Survivors generally need 75% of the former income to maintain living standards--40% of widows are living in poverty within 5 years of the death of their spouse.

Safeguarding your surviving spouse from elder abuse--most vulnerable are single women in their 80's with cognitive impairment.

  • Fraud and/or product solutions that are not in your BEST interest

What product solution do you need?  Are you being offered them at a competitive price?

  • Employment risk

Forced to retire earlier than planned for health reasons, caregiving responsibilities, job loss or because you can't take it anymore--40% + retire earlier than planned.

Unable to work part-time due to poor health or lack of jobs, skills, etc.

  • Public Policy risk

Changes to Social Security, Medicare and other programs.

Changes to tax code.

 

<NEXT:  Challenges>

 

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