What Are the Risks That Can Challenge Financial Security in Retirement?

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What are the risks that can challenge financial security in retirement? As in other life stages, retirees face financial risks – many of which are no longer borne by the government or employers, but must be managed individually. And, with increasing life expectancies, most people will need to manage these risks for decades. To integrate financial risk management with income distribution and wealth accumulation goals, the following risks must be addressed as you plan for retirement. 1. Longevity Risk 4. Health Care Risk Longevity risk refers to the possibility you Longer life expectancies, rapidly rising medical could outlive your money. It’s important to costs, fewer employer-sponsored retiree benefits remember that an average life expectancy is and the limitations of Medicare make health just that – an average. care expenses a significant risk in retirement. 5. Long-Term Care Risk 2. Market Risk After age 65, Americans have more than a 70% Investment markets can go up . and down. chance of needing some form of long-term Market declines early in your retirement will care.1 These expenses are not covered by private have a greater impact than a decline in later health insurance or Medicare and can destroy an years. otherwise sound financial security plan. 3. Inflation and Tax Risk 6. Legacy Risk Both taxes and inflation can take a bite out of Experience has shown that, as people age, their retirement savings – inflation by reducing your desire to leave a financial legacy to loved ones purchasing power, and taxes by reducing your or charity often increases. Without adequate income and leaving you with less money to planning many retirees risk not being able to spend. meet this objective. contact me so we can get together to discuss your plan for a secure retirement. The Northwestern Mutual Life Insurance Company Milwaukee, WI www.northwesternmutual.com 23-0116-07b (1209) 1 Americans Fail to Act on Long Term Care Protection, American Society on Aging, May 23, 2003..

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