5 Retirement Income Risks: Health & Post-Medicare

Having sufficient funds to ensure a stable requirement is something we all need to aspire to. But it’s not just a case of putting money into a pension pot or 401K. Whatever way you prepare for the golden years has associated risks, so it’s important to be aware of what they are and take strategic steps to reduce them.

Recognizing Risk: The 5 you need to be aware of 

• Risk 1: Personal and family
• Risk 2: Longevity
• Risk 3: Healthcare education
• Risk 4: Financial
• Risk 5: Public policy: Changes in social security and benefits 

Risk 1: Personal and family 

Issues, such as the death of a spouse or the diagnosis of a long-term, serious, or terminal illness can have a big financial impact. Losing a partner is likely to reduce pension benefits. Illness can bring large medical bills and create unexpected debt. 

Both members of a partnership should educate themselves as to the financial aspects of a relationship. Much heartache and financial loss can be avoided if both have at least an overview of how to handle financial affairs.

Risk 2: Longevity 

One of the biggest risks (and worries) to a comfortable retirement is living for longer than expected. We’re enjoying more years on this earth than ever before, and many of us will outlive our expected lifespan. Planning only for an average existence places you at severe risk of poverty (or a reduced lifestyle) should you benefit from many more years than anticipated. 

Risk 3: Healthcare education 

Healthcare poses one of the biggest risks to your retirement pot. Illness and care needs need to be considered and factored into your financial planning. It pays to educate yourself on such issues way before you might need to factor them into the equation. 

As well as paying for healthcare treatment if not insured, consider how you would pay for long-term care if needed. What about if you need to move into assisted living? Medicare does not help with this, despite many thinking it would be covered.

Risk 4: Financial 

Inflation and fluctuating interest rates have a large impact, especially for those living on a fixed income. Both of these need to be considered when investing in assets and/or calculating what your retirement income is likely to be.

Risk 5: Public policy: Changes in social security and benefits 

The nature of public policies is to be tweaked and altered over time. As the population lives longer, so the government makes changes to cover the increasing outgoings. Will your taxes go up? Will you suddenly not be entitled to as many benefits as you thought? 

While retirement planning can never be exactly determined, understanding risk and putting mitigation in place early will reduce the likelihood that your money won’t be enough to allow you to live your expected lifestyle.

Partner with Capita to Maximize your Potential and Understand Retirement Do’s and Don’ts

Unless you’re a financial professional, it’s you’ll likely look to take expert advice to plan for your retirement. Market-leader, Capita, works with its clients to create a bespoke strategy to address individual needs.

No two people’s requirements are the same. That’s why it’s vital to put in place a retirement plan that accounts for potential risks to income. No one wants to think their dotage will be blighted by a lack of money, making it crucial to think about retirement planning today.

Find out more about how the Capita experts can help at (no link on spreadsheet) and call today to arrange a no-obligation consultation.