As investors transition into a new phase of their lives, it is critical to recognize and address the five major risks that could impact their financial well-being. Every financial decision should be made through the lens of how it impacts these risks.


Drawdown Risk The first major risk retirees face is drawdown. This refers to anything that decreases the value of one's retirement savings or portfolio, whether through taxes, market loss, inflation, or having to pay retail for everyday items. As retirees, it is vital to conserve as much capital as possible, so it can be spent on the things that matter and be there when needed.


Inflation Risk The second risk is inflation, which is the inevitable increase in the cost of living over time. Inflation erodes buying power, making it crucial to invest wisely and not simply store money under the mattress. Failing to protect one's nest egg from inflation can lead to financial struggles in retirement, such as an inability to pay rent or put food on the table.


Longevity Risk The third risk is longevity. As medical advancements continue to progress, people are living longer, healthier lives. This means retirees must ensure their savings will last long enough to support them throughout their golden years. To do this, individuals must balance risk and make assumptions about how long their money needs to last.


Unexpected Expenses The fourth risk involves unexpected expenses that arise due to aging or unforeseen events, such as a medical emergency or damage to one's home. It is crucial to be properly insured and prepared for these expenses to avoid sudden financial strain during retirement.


End-of-Life Planning The final risk is the inevitable end of life. Retirees must plan for their last few years and ensure a smooth transition of finances to their loved ones. This includes having insurance policies, a financial plan, and a legal plan in place to prevent surviving spouses from inheriting debt or dealing with financial chaos.


In conclusion, retirees must consider these five major risks when making every financial decision, including when to file for Social Security. By addressing these risks head-on, retirees can better ensure a financially secure and enjoyable retirement.
Below is the unedited transcript.
There are. Five major risks that I see a or for retirees. It's for everyone in general, but it's specifically once we, as we're transitioning into retirement and you need to start thinking about this, within a few years of retirement.But there are five major concerns and really every financial decision you make shouldn't be made through the prism, through the lens of how does it impact me for. Five major risks. And those five major risks are, number one, is draw down, right? So anything that decreases the value of your retirement, savings of your portfolio doesn't matter whether it's taxes or market loss or inflation or having to pay, retail for something.And I was talking to someone the other. And I was like, listen, toilet paper, right? You know how much toilet paper you use? Just buy it up in bulk, right? So that you save that money, right? And it's not a lot of money, but if you're looking for ways to save and that can make a difference.We know how much toilet paper we're gonna use. Everything is a, it really is a penny saved as a penny earned. And when it comes to retirement, we need to hold onto as many pennies as possible. , everything that decreases the value of our portfolio. It doesn't just affect us today.It affects our entire retirement. It affects, five years from now, 10 years from now, 20 years from now, I have done analysis for clients and I've shown them how just saving. Figuring out how they can save 5,000 or 6,000 or $10,000 a year, right? And we're not talking about a lot of money, at least in, in portion for them.But we're talking, saving five, 10% off of your annual expenses. And again, that can come from taxes. It can come from maximizing your social securit