Many individuals excitedly await retirement, yet it also causes worry. After retirement, you may travel more, spend more time with family, and try new things. However, retirees face severe risks.

Older Americans may be more aware of the dangers. Compared to Generation Z, just 14% of the following generation is secure about their financial future in 2022, according to a Bankrate study in December 2021. Several factors contribute to the financial insecurity of retirement, including rising healthcare expenses, price fluctuations, and hyperinflation. As individuals encounter retirement, they must be aware of these and other dangers.

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Top Threats

The rising expense of health care

If you don’t prepare, you might find yourself in a financial bind as you age. According to Fidelity’s projections for 2022, the average 65-year-old couple will require $315,000 to cover their healthcare costs alone. In each scenario, the cost will be different, but this indicates what it will cost in retirement.

Because Medicare might not even pay all your medical bills, retirees’ healthcare is more expensive. For example, long-term healthcare, dentistry, and assistive devices are not included. Medicare Part A premiums could rise to over $500 per month by 2022.

Volatility in the financial markets

In the near term, the stock market may be highly volatile, making it challenging to develop long-term wealth. Research from financial management firm First Trust shows that the typical bear market in the United States lasts 1.4 years, with a loss of 41% on average. These bearish circumstances might seriously threaten your financial stability if they occur during your retirement years.

Therefore, having a well-diversified portfolio is a good idea as you approach retirement. At the conclusion of your employment, increasing the proportion of bonds in your investment might reduce your exposure to market turmoil. Bonds are less risky than stocks, but no investment is risk-free.

Inflation

If you’re retiring in 2022 and no longer accepting wage increases from a job, inflation is a concern for you. Luckily, Social Security adjusts benefits for inflation each year. Conversely, inflation might risk devastating your lifestyle even if you have plenty of available cash and aren’t dependent on work.

Investing in equities after retirement is a common way for retirees to combat inflation. Maintaining a small stock investment can help stave off the consequences of inflation, despite the fact that retirees typically have a lower stock allocation than those in their 20s. Some other investments, such as TIPS or Series I savings bonds, adjust for inflation regularly. This might be helpful.

Having no money left to spend

As a result, many retirees are concerned about running out of money. In addition to the fact that individuals are living longer than in previous decades, many retirees may not have the resources to cover their last expenses.

When it comes to saving for retirement, you can do a few things if you’re behind and worry about running out of money someday. Your retirement funds could be boosted by optimizing payments to an IRA and boosting your payments to a 401(k) or another plan.

Postponing Social Security benefits and purchasing insurance are two more options. If you postpone taking Social Security, you will receive more money each month. On the other hand, annuities allow you to purchase insurance that will pay you a fixed sum for the rest of your life.

The loss of a loved one

Your spouse also poses retirement risks. Pension benefits may be cut after a spouse’s death. Sharing expenditures with your spouse may make it harder to make monthly payments. Also, remember that funerals are costly.

Several insurances may help lessen the financial effect of your spouse’s death. Survivor payments and life insurance can reimburse you.

Conclusion

Retiring isn’t easy. Leaving a job requires several life and financial adjustments. After retirement, you may encounter medical expenses, macroeconomic variables, and inflation. Because there are so many factors, a financial counselor may be helpful. An advisor can help you assess how much money you’ll need and how to plan your draw-down.

If you’re worried about consultation costs, a fee-only fiduciary financial adviser can assist. This service may cost you upfront, but it will likely save you money over time.

Contact Information:
Email: [email protected]
Phone: 3604642979

Bio:
After entering the financial services industry in 1994, it was a desire to guide people towards their financial independence that drove Aaron to start Steele Capital Management in 2013. Armed with an extensive background in financial planning and commercial banking coupled with a sincere passion for helping people, Aaron has the expertise and affinity for serving the unique needs of those in transition. Clients benefit from his objective financial solutions and education aligned solely withhelping them pursue the most comfortable financial life possible.Born in Olympia, Washington, Aaron spent much of his childhood in Denver, Colorado. An area outside of Phoenix, Arizona, known as the East Valley, occupies a special place in Aaron’s heart. It is where he graduated from Arizona State University with a Bachelor of Science degree in Business Administration, started a family, and advanced his professional career.Having now returned to his hometown of Olympia, and with the days of coaching his sons football and baseball teams behind him, he now has time to pursue his civic passions. Aaron is proud to serve on the Board of Regents Leadership for Thurston County as the Secretary and Treasurer for the Morningside area. His past affiliations include the West Olympia Rotary and has served on various committees for organizations throughout his community.Aaron and his beautiful wife, Holly, a Registered Nurse, consider their greatest accomplishment having raised Thomas and Tate, their two intelligent and motivated sons. Their oldest son Tate is following in his father’s entrepreneurial footsteps and currently attends the Carson College of Business at Washington State University. Their beloved youngest son, Thomas, is a student at Olympia High School.Focused on helping veterans and their families navigate the maze of long-term care solutions, Aaron specializes in customized strategies to avoid the financial crisis that care related expenses can create. Experience has shown him that many seniors are not prepared for the economic transition that takes place as they reach an advanced age.With support from the American Academy of Benefit Planners – an organization with expertise and resources on the intricacies of government benefits – he helps clients close the gap between the cost of care and their income while protecting their assets from depletion.Aaron can help you and your family to create, preserve and protect your legacy.That’s making a difference.

Disclosure:
Disclosure:Investment advisory services are offered through BWM Advisory, LLC (BWM). BWM is registered as an Investment Advisor located in Scottsdale, Arizona, and only conducts business in states where it is properly licensed, notice filed, or is excluded from notice filing requirements. BWM does not accept or take responsibility for acting on time-sensitive instructions sent by email or other electronic means. Content shared or published through this medium is only intended for an audience in the States the Advisor is licensed in. If you are not the intended recipient, you are hereby notified that any dissemination, distribution, or copy of this transmission is strictly prohibited. If you receive this communication in error, please immediately notify the sender. The information included should not be considered investment advice. There are risks involved with investing which may include market fluctuation and possible loss of principal value. Carefully consider the risks and possible consequences involved prior to making an investment decision.Confidential Notice and Disclosure: Electronic mail sent over the internet is not secure and could be intercepted by a third party. For your protection, avoid sending confidential identifying information, such as account and social security numbers. Further, do not send time-sensitive, action-oriented messages, such as transaction orders, fund transfer instructions, or check stop payments, as it is our policy not to accept such items electronically. All e-mail sent to or from this address will be received or otherwise recorded by the sender’s corporate e-mail system and is subject to archival, monitoring or review by, and/or disclosure to, someone other than the recipient as permitted and required by the Securities and Exchange Commission. Please contact your advisor if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. Additionally, if you change your address or fail to receive account statements from your account custodian, please contact our office at [email protected] or 800-779-4183.