Here at AgingOptions, as you might imagine, we read quite a few articles about preparing for retirement. Many of them sound similar, with titles like “Five Things You Must Do Before Claiming Social Security,” or “Four Sure-Fire Ways to Get the Most Out of Medicare.” So we were a bit skeptical when we encountered this article on the Forbes magazine website called “Three Unusual Retirement Risks You Can’t Ignore.” However, as it turns out this article is definitely worth a read: it gives us all something to think about as we look ahead to our retirement years. It also reminds us of a fourth risk we want to warn you about. More on that in a moment.

Retirement Risks that Threaten Your Future

We should point out that this article’s focus is almost entirely financial, and while that’s extremely important, it’s by no means your only concern in retirement. You can make all the right financial decisions and still end up in a messy and unhappy retirement if you fail to put in place a plan for your future that is truly comprehensive and multi-faceted. Again, we’ll explain more in a bit, but for now let’s consider what Forbes has to say about these so-called hidden retirement risks that can derail our retirement plans.

“The stock market and personal health are two common things people tend to worry about during their retirement years,” writes Forbes columnist and financial planner David Rae. “Visions of being forced to move in with their children, a lack of savings and real estate prices can also cause anxiety.” So far this sounds familiar – until Rae adds, “While those may be top of mind for some, they may not really be the largest threats to financial freedom.” The retirement risks he lists are things that on the surface might not seem so bad, but each one can leave you unprepared for financial setback and exposed to an inappropriate level of financial risk as you age. Let’s consider Rae’s “big three.”

Longevity, Complacency, Emotion

• The Risk of Living Too Long. “This probably seems like a good thing,” Forbes says, “since we all tend to hope for of a long, happy and healthy life.” The problem, however, is that we can be unprepared for our longevity, because “many people often underestimate how long they may live.” The longer we live, the more our savings are subjected to the effects of inflation, Rae writes, making it harder and harder to stretch those retirement dollars as the years go by.  What’s more, those “average life expectancy” tables are of little help in actually predicting our lifespan, which is something none of us can do. The goal, Rae advises, is to save, invest and spend in such a way that you never run out of money.
• The Risk of Complacency. Writing in Forbes, Rae says that the healthy stock market has lulled many future retirees into a false sense of security. “The nine-year bull market has caused some to become complacent about the risks” of stocks, he writes. “Unrealistic expectations for stock market returns, over the long term, have also resulted. While your nest egg may be growing nicely, are you actually on track for your various financial goals?” His answer to the risk of complacency is to sit with a qualified financial planner and adjust your retirement account to better suit your age, your risk tolerance and your present and future financial needs. If you need some recommendations for a reputable financial planner, please contact us at AgingOptions for a trustworthy referral.
• The Risk of Relying Too Much on Emotions. “Many major decisions in retirement plans are more about emotion than math,” Rae writes, and we agree. Once again, because his focus is almost entirely on finances, his examples lean toward investments – for example, making stock market decisions based solely on fear, over-confidence, or a poorly-informed hunch. But we see the over-reliance on emotions in other areas of retirement as well. Rae’s solution when it comes to your retirement savings is to develop a written financial plan, get a good, professional, fee-based financial adviser, and stick to your strategy.

Ignorance Isn’t Bliss!

According to Rajiv Nagaich of AgingOptions, these retirement risks are valid, but he adds a fourth. “In all aspects of retirement – but especially when it comes to financial planning – people always think they’re more knowledgeable than they actually are. You ought to be very concerned about what you don’t know that you don’t know!” Unfortunately, Rajiv adds, financial planners typically aren’t much help when it comes to their clients bridging the ignorance gap. “Traditional planning is designed to keep you complacent, oblivious to what you don’t know. The solution is the kind of planning we call LifePlanning – the kind that puts you in charge and gives you the tools to avoid or minimize retirement risks.”

Living longer than you expected, growing complacent, letting emotions rule your decisions and over-estimating your own knowledge­­­ – these are all real retirement risks. But with an AgingOptions LifePlan in place, you can replace those risks with a sense of confidence and security, building the retirement of your dreams with the right blueprint as your guide. We invite you to find out more about the LifePlanning process by joining Rajiv Nagaich at an AgingOptions LifePlanning Seminar – a free, fast-paced, information-packed event where you’ll get many of your retirement planning questions answered. Click here for our Live Events page and register for the seminar of your choice. Don’t let retirement risks derail your future plans. Come discover a better way: a LifePlan from AgingOptions. Age on!

(originally reported at www.forbes.com)

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