Everyone?s path to retirement and through it is different. Understanding that path, both for the individual prospect you?re working with and more generally, can provide important perspective during the sales process. I came across the list below from a study conducted by Metlife Mature Market Institute, and found it to be a helpful single source of all the pitfalls and obstacles that can threaten a secure retirement. But it also serves as a reminder that anxiety, concerns and fears on the part of our prospects are real. Some of these risks may have been mitigated with good planning, but others remain.
It?s worth a review.
Fifteen Retirement Risks*
Longevity: Outliving Retirement Resources
? I might deplete all of my savings
? I might not be able to maintain a reasonable standard of living for the rest of my life
? I might not be able to leave money to my children/beneficiaries or their heirs
Inflation
? I might not be able to keep the value of my savings and investments up with inflation
Interest Rates
? My income in retirement may vary based on changes in interest rates
Stock Market
? My assets may be eroded due to stock market declines or fluctuations, including stocks in a current or former employer
Business Continuity
? My pension or an annuity I purchased might be reduced due to insolvency of my former employer or an insurance company from which I bought an annuity
Employment
? I might not be able to work as long as I planned
? I might not be able to secure part-time work in retirement to supplement my income
Public Policy
? My financial resources in retirement will be reduced due to changes in government programs such as Social Security or Medicare
? My financial resources in retirement will be reduced due to increases in taxes
Unexpected Health Care Needs and Costs
? I might not have enough money to pay for a long stay in a nursing home
? I might not have enough money to pay for adequate health care
Lack of Available Facilities or Caregivers
? I may not have access or be able to afford quality facilities or caregivers when I need long-term care services
? I might not be able to rely on children or other family members to provide assistance
Loss of Ability to Live Independently
? I might not be able to live independently any longer
Change in Housing Needs
? I might not be able to afford to stay in my current home for the rest of my life
Death of a Spouse
? My spouse/partner may not be able to maintain the same standard of living after my death, if I should die first
Other Change in Marital Status
? I might have retirement savings depleted due to divorce or unwanted action by my spouse
Unforeseen Needs of Family Members
? My retirement resources might be depleted due to providing urgently needed help to other family members
Bad Advice, Fraud, or Theft
? My retirement resources might be depleted due to bad advice
? My retirement resources might be depleted due to fraud or theft
*Source: Society of Actuaries
Source: http://blog.glynndevins.com/2012/12/risks-to-retirement/
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