The decision to retire can feel like a leap into the unknown, but it certainly doesn’t have to be that way. After years of careful planning and consultation with us, you should be well prepared for anything life throws your way. Still, any scenario carries some risk, as you have learned through years of financial analysis and investing. And sometimes life throws you curve balls that affect your financial status as well. So before you retire, consider these common risks and make a plan to deal with each of them.
Market fluctuations and unexpected events. A lifetime of investing has taught you that nothing is guaranteed. However, when we’re young and ambitious, it is often easy to overcome fear of loss in hopes of making major gains. Once we retire, stability and security become more important. So, as you transition into retirement, remember to analyze your risk tolerance once again. Many retirees decide that this is the time to switch to a more low-risk investment philosophy.
Health problems and the rising cost of care. A recent estimate from HealthView services stated that the average 65-year-old couple, retiring today, can expect to spend $266,000 on Medicare premiums over the course of their retirement years. That doesn’t even account for out-of-pocket expenses! Part of a comprehensive retirement plan includes analysis of various insurance options, and consideration of rising healthcare costs.
Speaking of health problems, you should also consider the cost of specialized nursing care, which can cost an average of $3,628 to $7,698 per month, depending upon the level of care required. Costs for in-home care can be even higher.
Inflation. You’ve planned for enough retirement income to generously cover all of your lifestyle needs… But how will that income stack up in twenty years? We often don’t notice inflation from one year to the next, but it will certainly impact your purchasing power a couple of decades. As you transition into retirement, consider different methods of establishing an income that gradually increases over time, to keep pace with inflation.
We can help with planning for all of these issues, or any other problems you might face. Even after you retire, continue to meet with us regularly so that we can help you anticipate any bumps in the road, and plan for them accordingly.