Today’s Question:
While you can’t avoid risk completely, it’s important to understand and address risk, especially when it comes to your financial plan. Are any of these five risks threatening your finances?
Click on the timestamps below to jump to specific topics.
Confidence Corner
The year 2020 has been full of risk–from the murder hornets to COVID-19. What are the different types of financial risks we might face? Today, we talk about five financial risks you should be aware of. These types of risk will happen no matter where you are in your retirement journey, so it’s important to know what you may encounter and how to address it.
Market risk is high on everyone’s risk list. No one can know and totally eliminate market risk if you are investing in the market. Everyone is trying to make the same buying and selling decisions as you are. You can’t stop market risk from happening, but you can control the volatility in your portfolio.
How does interest rate risk impact you as an investor? How will low or high interest rates affect your portfolio? What kind of risks does this bring, even with your bonds?
Do you have a source of income that will be able to outpace inflation? If you are solely dependent on Social Security or your pension, your quality of living will go down if you can’t keep up with inflation. You have you have inflation factored into your retirement plan, because it will inevitably be a part of your future.
Since it’s an election year, you may want to consider how the tax rates could change in the future. Understand how different tax proposals will change your life. Make sure you vote for what’s most important to you.
Lastly, people are living longer. As the average age increases to living until your 90s, you face a risk multiplier. How can you prepare and plan in advance to ensure your finances will cover added longevity? What happens if you don’t prepare enough beforehand?
Are you handling these risks well? Do you have a plan in place that helps relieve some of the stress that these risks may cause?
Listen to the full episode or click on the timestamps below to hear about a specific type of risk.
2:04 – The top financial risk people fear is market risk.
5:19 – What do you need to know about interest rate risk?
7:50 – What does inflation do in retirement?
10:57 – Tax risk a huge
15:22 – What is a risk multiplier?
A Point Of Wisdom:
“Start saving as early as you possibly can and get a plan in place.”
-Nathan O’Bryant
Related Content:
PODCAST: How to Set Financial and Retirement Goals
PODCAST: Are You Following Outdated Financial Rules
Additional Resources:
Download Your Retirement Rescue Toolkit – Learn More About Our Firm
Your Guide:
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