One of the primary reasons for having a retirement plan in place is to help mitigate the risks that come with retirement.  At Pulse Financial we identify and solve for all the risks our clients face.  There are many but we will address the four most common risks.

Longevity Risk:

the risk of running out of assets before running out of time.  It seems counterintuitive but a major risk in retirement is living long.  It is a great gift to live a long life but it is not without cost!  And since we don’t know how long we have, it is critical to have a plan in place for an extra-long retirement.

Inflation Risk:

the risk that that rising prices associated with inflation could outpace the returns delivered by your investments.  In retirement no one issues you an annual raise so if you want your portfolio to be able to deliver a cost of living adjustment (COLA) you need to have it baked into your retirement plan.

Healthcare Risk:

the risk that the rising cost of healthcare including premiums, the need for long-term or nursing care, and other medical-related costs exceed your assets.  In 2019 the average cost of healthcare in retirement NOT including long-term care was $150k for women and $135k for men.

Market Risk:

the risk that an investor experiences losses due to factors that affect the overall performance of the financial market.  This risk can be hedged but not eliminated through diversification which is why it is important to have assets invested differently for different time horizons and different goals.

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