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November 6, 2022 // Risk Factors for Retirement:

Retirement risk factors

Retirement is a time for a reprieve after a lifetime of working, where you can finally pursue activities that you haven’t had the chance to do before or relax and enjoy the company of loved ones. But when retirement is on the horizon, so are the financial risks associated with this milestone. When you spend too much, veer away from your original retirement plan, begin to dip into a savings account, or when unexpected events happen, like sickness or economic downturns, it could put your retirement finances at severe risk. Fortunately, with methodical steps and assistance from a retirement planner in Calgary, you can mitigate any financial risks during retirement and enjoy newfound freedom without worry.

Find out the risks when it comes to retiring and how you can measurably avoid them, so you can relish this milestone as it comes.

Market changes

The global market is always shifting, and it is more often than not volatile. Market volatility can greatly impact how comfortably you can retire, as a sudden downturn could shrink all of your assets. If the market is bad and your assets are minimized as you enter into retirement, the first initial years of retirement can indicate how the rest will go. With the help of a financial planner in Calgary, you can prepare for the market’s volatility and create a comfortable nest egg for the future.

Longevity

Lifespans are increasing as modern medicine advances, which is something to consider as you prepare for retirement. If you formally retire at 65, you can live upwards of 20 years after that, or more, and money that you have saved can easily dwindle within those 20 years. For many people, retirement can last for longer than they have worked in a lifetime and spending more than retirement savings can occur more easily than one might think. To adjust to the longevity of your retirement, you can invest in annuities, which is a monthly stipulation provided by an insurance company for the cemented length of the invested contract runs. More so, you can look into other financial resources to rely on, such as services through government aid, with the help of a financial advisor.

Healthcare

General healthcare expenses can significantly impede your retirement savings, and health concerns are more likely to occur as you age into retirement. While Canada’s healthcare covers surgeries and treatments, there are still medicinal areas that still will cost you money without employment insurance. And as you get older, the need to pay for medication, eye care, and dental work will increase, and the bill will inevitably swell in size. Health care can easily drain your bank accounts, and prepare for this by investing in retirement insurance and creating a separate fund for healthcare.

Long-term care

Long-term care is often necessary for many individuals as they age and when their home is no longer functional for their needs, where long-term care facilities can provide it. Long-term care is also a costly necessity, and it can greatly diminish your retirement savings. While government incentives are available to help minimize the cost of securing a room in a long-term care facility, you’ll more than likely still need money to pay for the rest. Of course, an allotted amount of money can be set aside for this potential future arrangement that will involve strategic planning for these steps with a professional.

Inflation

Inflation refers to the rising cost of goods and services in any economy, and it can happen gradually or swiftly, depending on the current global market. When inflation happens, it can begin to erode your retirement savings and can negatively impact your long-term retirement plans if you have to keep up with the rising prices continuously. Before your retirement, you must factor in that inflation will happen and make a strategic plan to stay on top of the rising prices without losing your savings.

For the best financial planning advice in Calgary, visit PlayCheques Financial Planning. As dedicated financial professionals, we are committed to helping our community of Calgary with financial planning and wealth management. PlayCheques’ team of professionals are also experts in estate planning, retirement planning, and financial planning for doctors. Using a unique behaviour approach to serve our clients in Calgary, Playcheques assists each and everyone with the utmost understanding and integrity. We aim to safeguard your financial future with direct solutions that will prove beneficial.