Even with careful planning and diligent saving, some parts of retirement planning are out of your control. Here’s a look at four common retirement risks and how to address them.
1. Longer Life Expectancy
There are many benefits to living longer, but it also means carefully considering strategies to avoid outliving your savings. You are eligible to start collecting Social Security at age 62 but the longer you wait, the larger your benefit will be. You may also want to consider other sources of regular income, such as annuities to supplement Social Security Benefits and withdrawals from your retirement account. You may want to discuss annuity options with a financial advisor before adding one to your portfolio.
2. Medical Costs and Long-Term Care
Increasing health care costs is another risk to consider. Even if you don’t anticipate needing long-term care anytime soon, it may be worth considering long-term care insurance now. It typically becomes more expensive as you age.
3. Market Risk
Market fluctuations are a natural part of the market cycle, yet a downward trend right before retirement can lower the value of your investments just when you need them most. As you near retirement, consider rebalancing your portfolio to include more lower-risk investments that are less likely to be affected when markets head south.
4. Rising Inflation
There isn’t much you can do to stop inflation, but you can purchase assets that protect against some of its effects. Such as real estate investments or Treasure Inflation-Protected Securities (TIPS), which offer a fixed rate, but their principal is adjusted for inflation.
Understanding these risks to retirement can help you know how to address them and keep your savings on track.
If you are considering retirement any time soon and need a reliable guide, give us a call at 602-343-9301 or click here to schedule a phone call. We’d love to continue the conversation.
This content is provided for informational purposes only. It is not intended to serve as the basis for an individual’s financial decisions. Strategy Financial Group does not provide specific legal or tax advice. Strategy Financial Group is not affiliated with or approved, endorsed, or authorized by the Social Security Administration or any other government agency. Please consult with the Social Security Administration or your tax or legal professional for guidance on your individual situation. Investing involves risk, including the potential loss of principal. Any references to protection benefits or lifetime income generally refer to fixed insurance products, never securities or investment products. Insurance and annuity product guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company and may be subject to restrictions, limitations or early withdrawal fees. Insurance products are offered through Strategy Financial Insurance, LLC, an affiliate of Strategy Financial Group, LLC. Annuities are not suitable or appropriate for all individuals, are subject to fees and surrender charges, and pay customary commissions to Strategy Financial Insurance and/or your licensed insurance agent. Clients are never obligated to purchase the insurance products we recommend, or to purchase them through our affiliates. Investment advice is offered through Strategy Financial Services, LLC, a Registered Investment Adviser.