How to Manage Your Retirement Risks

The decision to retire, leave behind a steady paycheck, and live on a fixed income can be a scary one for many people. You might worry about your budget, or even about outliving your money. There are no guarantees about anything, but there are four risks that we all face in retirement. Read on for information on how to manage them.

Inflation. Rising prices concern all of us, but during your working years you can hope for gradual increases in your pay to compensate for a higher cost of living. Once you retire, you are right to worry that your budget in the beginning of retirement won’t sustain you in 20 years. However, you should remember that as you age, your needs will change. For example, the rising cost of gas won’t concern you so much when you don’t have a daily commute to work. Even so, if you’re very worried about inflation, you might consider setting up a stream of income that gradually increases in order to keep pace with it.

Investment losses. When you first began saving for retirement, you might have chosen riskier investment options. You wanted to build capital, and you knew you had time to make up for any losses you might experience. As you get closer to retirement, you might consider switching to a lower-risk, more stable investment philosophy.

The cost of health care. As you probably know, the cost of health care is rising rapidly. But you might not know that Medicare won’t actually cover all of your medical expenses. You will face choices between different Medicare plans, and even supplemental plans, that can greatly impact the amount of money you pay out of pocket. Perhaps the best thing you can do is to start taking care of your health now, so that you can prevent or postpone the development of many common health problems.

Long term nursing care. Speaking of Medicare, did you know that it won’t actually cover the cost of long-term care in many instances? The burden of that expense could fall on you, and it might be significant. As you grow older, it would be wise to make sure your income could cover the cost of long term nursing care, or consider purchasing long term care insurance.
If you’re worried about these retirement pitfalls, or any other problem you could face in the future, call our office to schedule an appointment. We can discuss your retirement concerns and then put together a plan to address them.

15159 – 2015/12/10