In the United States, the Society of Actuaries (SOA) has identified some post-retirement risks that can seriously affect your income. They also grouped these risks into four main categories. So, retirees or people who are trying to prepare for a dream retirement should definitely take them into consideration. Better prepared than sorry, right?
Below are the four categories every American should know:
- Personal and Family: Changes that can occur in your life or the life of a loved one
- Healthcare and Housing: The need for professional caregivers or moving to a facility due to failing health
- Financial: Revolving around inflation, investments, and stock market activities
- Public Policy: Governmental decisions that could seriously affect retirees
“There are many unexpected demands for a retiree’s funds. For that exact reason, everyone needs a realistic emergency fund. If a retiree needs to take large amounts of tax-deferred money early in retirement, it may result in future dollars being spent today. It not only decreases the amount of lifestyle money available; the money is gone, along with the potential to earn a return (compounding effect) that was to assist the retiree in the future. Spending dollars today takes away the future growth of that money, which may have been critical to maintaining a certain lifestyle or not outliving your money,” says Peter J. Creedon, CFP®, ChFC, CLU, chief executive officer, Crystal Brook Advisors, New York, N.Y.
So, no matter if you’re already retired or close to doing so, you should read about these risks carefully. Click on the ‘NEXT’ button to find out more!