Your retirement plan is like an iceberg. It's not what you see that can jeapordize your future, it's what you can't see below the surface. Here are five factors that could sink your retirement:
Market Risk
What goes up also goes down. Are you evaluating your investments solely based on returns or do you account for their risks too?
Sequence of Returns Risk
Suffering negative returns early in retirement can dramatically accelerate the depletion of your retirement savings.
Inflation Risk
Expect the cost of living to double roughly every 20 years. If you work for someone now, you probably get a cost-of-living adjustment from time to time. How will you ensure your retirement income can keep up? Try making automatic deductions and deposit them into a savings account. Consider the amount you need to deposit not just to keep up with inflation, but also to build a decent return on your money.
Longevity Risk
How will you ensure you don't run out of money before you run out of time? Spending too aggressively could deplete your savings. Spending too conservatively could mean sacrificing the lifestyle you envisioned.
Long-Term Care
If you're married, the odds are significant that one of you will require assistance with Long-Term care at some point during your lives. The costs could easily bankrupt your retirement savings and ruin your plans. Relying on public assistance if and when the time comes could be risky too. Medicare doesn't cover long-term care services and Medicaid is a political hot potato (politicians are always looking to make cuts). Either way, you might be relying on loved ones for assistance; how will you help them to help you?
No matter where you are on the road to retirement a second opinion from a Certified Financial Planner™ can help remove the worry. To schedule a complementary phone consultation at a time that is convenient for you, please click here.
About the author: David A. Iobst is a fee-based Certified Financial Planner™ based in Bear, DE. He is currently accepting clients in DE, PA, and MD.
Securities and Investment Advisory Services offered through LifeMark Securities Corp. Member FINRA/SIPC 400 West Metro Financial Center Rocherster, NY 14623. 800-291-7570. .