StemCell Therapy

Which risk factors pose the greatest threat to a retirees finances?

The Center for Retirement Research at Boston College (CRR) recently published a paper taking a deep dive in search of answers.

The researchers looked at five factors and offered objective answers, as well as subjective answers from retiree interviews.

They considered five risk factors: longevity risk (outliving your money); market risk (investment losses); health risk; family risk (unforeseen need of a family member); and policy risk (such as cuts to Social Security benefits).

Survey participants viewed market risk as the greatest threat, due to the participants exaggeration of market volatility, according to the survey authors.

The CRR study suggests retirees should reassess the risks.

Objectively, the study found longevity risk, followed by health risk, to be the most serious factors.

So, could it be that the scariness of stock market crashes clouds our judgment?

Could it be we worry too much about market risk because its here and now, while living very long or developing health problems is something that may happen later, if at all?

If your account statement shows a large drop, you know exactly how big a hit youve taken. It poses an immediate and measurable risk to your finances.

If your doctor tells you your cholesterol is too high or that you need to lose weight well, you may feel fine, so how bad can it be? Doctors are programmed to warn about that stuff, anyways.

Sometimes, I hear people men in particular pooh-pooh the chance of their living a long life. They may say something to the effect of my dad died before 80; I likely wont last much longer. As if heredity were the only, or even dominant, factor.

Read more from the original source:
Jorgen Vik: What are the five greatest threats to your retirement finances? - The Daily Progress

This entry was posted on September 13, 2020 at 2:52 am and is filed under Longevity. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed. |