In this episode of Inside the Plan, the 401(k) Brothers, Bill and Andy Bush, explore the key risks retirees face and the importance of planning ahead to mitigate them. They discuss longevity risk, inflation, healthcare expenses, investment volatility, liquidity concerns, family responsibilities, and public policy changes, providing insights on how to prepare for a secure retirement.
Key Takeaways
✔ Longevity Risk – Running out of money before you run out of life.
✔ Inflation Risk – The rising cost of living affects retirement budgets.
✔ Healthcare & Long-Term Care Risk – Increasing medical expenses and the need for caregiving support.
✔ Financial Elder Abuse – A growing threat from scams and even trusted individuals.
✔ Investment Risks – Stock market volatility, interest rate changes, and sequence of return risks.
✔ Liquidity Risk – The importance of keeping accessible cash reserves.
✔ Work-Related Risks – Counting on employment but facing health or job market obstacles.
✔ Loss of a Spouse – Financial and emotional adjustments following a partner’s passing.
✔ Public Policy Risk – Changes in Social Security, Medicare, and tax laws can impact retirement plans.
Time-Stamped Chapters & Breakdown
📌 00:00 – Introduction: Why Planning for Risks Matters
- Bill and Andy introduce the variety of risks retirees face.
- Overview of how good planning can help navigate unexpected challenges.
📌 01:30 – Longevity Risk: Will Your Money Last?
- With increasing life expectancies, retirees need to plan for 30+ years of income.
- Key strategies: Annuities, diversified investments, and sustainable withdrawal rates.
📌 03:15 – Inflation Risk: The Erosion of Purchasing Power
- Over time, inflation can double the cost of living in retirement.
- Example: A $5,000/month budget today could need $10,000+ in 20 years.
- Ways to protect against inflation: Social Security COLAs, inflation-protected investments (TIPS), and adjustable withdrawal strategies.
📌 05:10 – Healthcare & Long-Term Care: The Cost of Aging
- Medical costs are rising faster than general inflation.
- 70% of retirees will require long-term care assistance at some point.
- Mitigation strategies: Medicare planning, long-term care insurance, and HSAs (Health Savings Accounts).
📌 07:00 – Investment Risks: Navigating Market Uncertainty
- Market risk: Stock market volatility can impact retirement savings.
- Interest rate risk: Rising rates affect bond values and fixed-income investments.
- Sequence of return risk: A market downturn early in retirement can have long-term consequences.
- How to mitigate these risks: Diversification, maintaining a cash reserve, and gradual portfolio adjustments.
📌 09:00 – Liquidity Risk: Having Cash When You Need It
- Some assets, such as real estate or private equity, are not easily converted to cash.
- Importance of having liquid savings to cover emergencies and unexpected expenses.
- Balancing liquidity with long-term growth.
📌 10:20 – Financial Elder Abuse: Protecting Yourself from Scams
- Retirees are common targets for fraud and financial abuse.
- Warning signs: Unusual account activity, pressure to give money, and sudden changes in estate planning.
- Ways to stay protected: Trusted contacts, power of attorney, and financial monitoring.
📌 12:00 – Work-Related Risks: Can You Count on Employment?
- Many retirees assume they’ll be able to work part-time, but health or job market changes may prevent it.
- Reemployment risk: Older workers may struggle to find new jobs if they need additional income.
- Plan for financial independence, not reliance on future employment.
📌 13:30 – Family-Related Risks: Unexpected Financial Responsibilities
- Many retirees end up supporting adult children or grandchildren, impacting their savings.
- Importance of setting financial boundaries while still helping loved ones.
📌 14:30 – Loss of a Spouse: Emotional & Financial Adjustments
- The loss of a spouse can create a significant financial shift, especially with Social Security income reduction.
- Planning ahead: Survivor benefits, estate planning, and joint-and-survivor annuities.
📌 16:00 – Public Policy Risk: How Government Changes Affect You
- Social Security & Medicare uncertainties – will benefits be reduced in the future?
- Tax law changes can affect retirement withdrawals and income planning.
- Staying informed and adapting to new regulations is crucial.
📌 18:00 – Final Thoughts & Key Takeaways
- Anticipating risks and creating a plan helps mitigate their impact.
- “Don’t worry alone—worry with us and let’s plan together!”
Sound Bites
- "What if you're still breathing at 95 or 97?"
- "Financial elder abuse could be scams or even people they know taking advantage."
- "You have to plan and anticipate these risks."
Connect with Us
💡 Have questions or concerns about your retirement plan? Don’t navigate these risks alone! Contact us:
📩 Bill Bush – bbush@horizonfg.com
📩 Andy Bush – abush@horizonfg.com
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