You’ve officially changed gears from accumulating assets to distributing. 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 of going back to work, well if you can find a professional job that is. 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 one can never want to think of.
There are also other risks that retirees face. The second highest in priority is the risk of going into a nursing home and leaving your family out of inheritance. 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 depleted in a matter of 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 later.
Longevity is another one risk. With people living longer than ever before having enough money to last for as long as you last is critical.