Post retirement risks: How to overcome them

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Post-retirement risks are unplanned happenings that have an impact on your well-laid retirement plan. Some of these risks are beyond our control. You can only plan with a marked surplus just in case.

Does it scare you that your plans may not be helpful in the future? Well, you don’t need to worry since some of the risks can be managed. Here are some of the post-retirement risks and how to deal with them.

Inflation

Inflation is a threat for retirees, especially since the prices of many things rise as people age. The Bureau of Labor Statistics estimates that prices generally rise 3 percent a year – which means a person who spends $30,000 a year on goods and services could spend more than $50,000 at age 75.

A couple of strategies to mitigate this risk include:

  1. a) Buy health insurance with inflation protection. If you drop your health insurance after retiring, make sure it includes annual inflation protection. A policyholder with an inflation deductible of 3 percent (the typical level) will see their out-of-pocket expenses rise by nearly 20 percent in the first year, which will quickly eat away at any savings.
  2. b) Lower your living expenses. It’s important to avoid lifestyle creep after retirement. If you’re paying $500 a month for premium cable TV, you might want to think about cutting that expense or replacing it with Netflix or Hulu+ (both $8 per month). Reducing your spending can also help most retirees increase their savings, which will protect you against the risk of higher medical care costs down the road.

Reduced Income

When one retires, income levels reduce significantly. As such, you may not afford most of the goods and services if you Don do not have a lay-back plan.

You can cushion yourself by creating passive income over the years. It can be income from rental properties, dividends, or the sale of books and E-books.

If you have a hobby you have been enjoying, you may want to monetize it as you near your retirement age. In so doing, you can earn as you enjoy doing what you love.

Unexpected illness in the family

You may have all the money saved up for your retirement. You calculated what you needed on expenses, how much you needed to adjust, and started early. However, illnesses in the family can happen unexpectedly. Some of the illnesses can exhaust your medical covers, thus eating away part of your retirement package.

Well, no one can cushion themselves fully from such happenings. However, you can diversify your investments over the years. With more income generated, even with such happenings, you can still be comfortable.

Additionally, you can have better health insurance coverage that will cover you and your family members.

Increased Life Expectancy

While increased life expectancy is something to be happy about, it harms your retirement plans. Living longer means you will need more finances to get by. You may also live longer but fall sick from time to time. Your financial resources can be Inadequate for your comfort.

The rule of thumb remains to start your retirement plan early. You can start saving as soon as you start working. After estimating how much you will need, you can save more than what you project.

Personal Risks

Some personal risks one may face when planning for retirement include a change in their marital status. You can be planning your retirement as a couple but get a divorce before you retire. It poses a financial risk to both parties involved. You may find yourself struggling financially since you will pay all the bills. You will need to work harder to maintain your living standard. Also, your spouse may die before you retire. As such, you will need to adjust your plans to have a better retirement package.

While couples can go for counseling to ensure longevity in marriages, couples must have agreements on their finances. It reduces incidences of financial loss in the eventuality of a divorce.

Slips and Falls

Here at Vivante Living, we often hear that one of the biggest concerns for seniors is slipping and falling. Two things play into this; muscle weakness and bone density. We all know as we age, our bones start to soften and become more fragile. Our muscles loosen as well, which leads to balance issues. Men, don’t think that this only happens to women because it doesn’t. They may experience it a bit differently, but we also see men with this problem. We find that people who do not engage in regular exercise and spend a lot of time sitting down like retirees can be prone to falls. It’s important to have a routine of doing regular physio exercises to address this issue.

Maintaining your nutrition is also a big key, as this can affect your bone density. Just something to think about as you plan your retirement activities.

Exercise and Keeping active

Maintaining a healthy, active lifestyle once you stop working is no easy feat.

Physical activity can decline by 15% with every decade that you age, according to the CDC, and is associated with an increased risk of chronic disease, disability, decreased function, depression, anxiety, and early death.

The risk may be even greater for women, who are twice as likely as men to develop osteoporosis or arthritis. Experts are torn on how much exercise is necessary to maintain health in older age. A recent study found that older adults who reported exercising for less than 75 minutes per week had a 75% higher mortality rate than those who exercised for at least 75 minutes per week and an almost 40% higher mortality rate than those who exercised for at least 150 minutes per week.

Loneliness

 Loneliness is more common in seniors who live alone or don’t interact with others because they lack family or friends. A study from Brigham Young University found that loneliness can cause as much harm as secondhand smoke, making it as detrimental as living without a spouse or close friend for more than a decade.

Retirement planning takes into account what you will need once you retire. While taking care of your liabilities to ensure you don’t have many debts is a good place to start, you can take insurance plans and invest wisely. While there’s no guarantee that your plans will work as you wish, you can manage your post-retirement crisis by saving up more than you need.

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