You’ve officially changed gears from saving to spending. So, as a retired person, why do you need to evaluate your options?
For starters market risk, the risk of the market crushing and wiping out a portion of your hard earned money and putting you at risk. For many retirees this is one of the biggest risk that they are facing, and if their investments are not in the right places, or in the right percentages, the risk of a market crush can be as severe and drastic as no one want to think of. Alternatively, if your investments are too conservative, are you going to lose on getting more growth versus not.
There are other risks that retirees face. The second highest in priority is the risk of going into a nursing home, and depleting all your saving. For many that is a real issue. With the average monthly cost of a nursing home pushing thousands of dollars a month, it isn’t hard to see how retirement savings can be easily spent in a matter of few years. There are ways to plan for events like that and build a strategy so you avoid any unpleasant surprises.
And if you’re not concerned about nursing homes, you may want to understand the impact of inflation. People don’t realize how living expenses creep up and they fail to realize that prices in 20+ years will be way different that they are today. So running out of money because you underestimated the real inflation is another risk that may want to explore a lot sooner than not.
Longevity can be a blessing and a risk. With people living longer than ever before having enough money to last for as long as you last is critical.
And lastly, overspending or underspending. If you’re planning on spending all your money in your life time, or If you’re planning on leaving an inheritance, do you know if you’re spending appropriately?
Knowing the answers to these questions and more may help you build more confidence in your future financial plans.
