There are three risks that are most likely to derail retirement plans. The risks are real and substantial, almost regardless of an individual’s net worth. Fortunately, the potential damage from the risks can be reduced.
Longevity risk is talked about a lot by economists and financial advisors but not by many retirees and pre-retirees. While there are a lot of benefits to living a long time, longevity increases financial risk. You need to pay the living expenses for all those extra years. Also, your annual expenses might increase, because people generally need more medical and long-term care as they age.
Many people underestimate their life expectancy, and that’s why they don’t carefully consider longevity risk. A man who is 65 years old today has a 22-year life expectancy. That means he has a fifty percent probability of living to age 87 or longer, according to the LIMRA Secure Retirement Institute. One in four men age 65 today are expected to live to age 93. Among women aged 65 today, one in four will live to age 96 or longer. Despite a narrowing of the gap in recent years, women still are likely to live several years longer than men in their age group.
Click here for more information: https://www.forbes.com/sites/bobcarlson/2021/01/19/how-to-beat-the-three-greatest-retirement-risks/?ss=personalfinance&sh=324245df64c8