Protect What You’ve Built: Managing Risk in Retirement

You’ve Worked Hard for It—Now It’s Time to Protect It

After decades of saving, investing, and preparing for retirement, the last thing you want is for unexpected risks to threaten your financial security. Yet, that’s exactly what happens to many retirees who underestimate how unpredictable retirement can be.

October’s National Financial Planning Awareness Month is the perfect reminder that a strong plan isn’t just about earning more—it’s about protecting what you’ve earned.

Let’s explore the most common risks retirees face and the strategies you can use to safeguard your savings.

The Five Biggest Retirement Risks—and How to Manage Them

Risk	Why It Matters	Protection Strategy
Market Volatility	Market downturns can erode principal and reduce income.	Fixed Indexed Annuities (FIAs) provide market-linked growth with no downside losses.
Longevity Risk	Living longer than expected can stretch savings too thin.	Annuities and guaranteed lifetime income options ensure income for life.
Healthcare & Long-Term Care	Medical and LTC expenses are often underestimated.	LTC riders or hybrid life insurance policies offer coverage and asset protection.
Inflation	Rising costs can erode purchasing power.	Assets with growth potential, such as FIAs or inflation-adjusted annuities, help offset inflation.
Taxes	Withdrawals from retirement accounts may trigger higher taxes.	Tax diversification through Roth accounts and planned withdrawals can minimize impact.

1. Market Volatility: The Silent Wealth Killer

Market downturns hurt most when they happen early in retirement—when withdrawals compound losses.

This is called sequence-of-returns risk. For example:
Two retirees with identical portfolios can experience dramatically different outcomes based solely on when a market decline occurs.

Safe Money Strategy:
Protect a portion of your portfolio in vehicles that can’t lose value, such as fixed indexed annuities (FIAs). They offer potential market-linked growth while preserving principal from losses.

2. Longevity Risk: Outliving Your Money

People are living longer than ever—many well into their 80s and 90s. The challenge? Your retirement income needs to last as long as you do.

How to Plan for Longevity:

Create lifetime income streams through annuities.
Delay Social Security to maximize your monthly benefit.
Maintain a portion of growth assets for long-term inflation protection.

Remember: Longevity amplifies every other risk—from inflation to healthcare. Planning early reduces those compounding effects.

3. Healthcare and Long-Term Care Costs

Even with Medicare, healthcare expenses can add up. Fidelity estimates the average couple retiring at 65 will spend over $315,000 on healthcare alone during retirement.

Long-Term Care (LTC) Risk:

A single extended care event can drain savings quickly.

Protection Options:

Annuities with LTC riders – provide enhanced income if care is needed.
Hybrid life insurance – combines death benefit and LTC protection.
Health Savings Accounts (HSAs) – offer tax-free withdrawals for qualified medical expenses.

Planning early locks in lower premiums and ensures coverage when you need it most.

4. Inflation: The Slow Erosion of Buying Power

Even moderate inflation can quietly erode your retirement income over time.

Example:

At 3% inflation, $60,000 today will only buy what $33,000 does in 20 years.

Protection Strategies:

Use annuities or bond ladders with inflation-adjusted features.
Keep a portion of assets in growth-oriented investments.
Adjust your withdrawal strategy every few years to account for rising costs.

5. Taxes: The Overlooked Retirement Expense

Taxes don’t stop at retirement—they just change form. Distributions from IRAs, 401(k)s, and pensions are usually taxable. Without planning, this can reduce your take-home income and trigger higher Medicare premiums.

Tax-Efficient Strategies:

Consider Roth conversions before RMD age to create future tax-free income.
Use Qualified Charitable Distributions (QCDs) to reduce taxable income.
Coordinate withdrawals strategically across taxable, tax-deferred, and tax-free accounts.

A proactive tax strategy can save thousands over your retirement years.

The Role of “Safe Money” in Risk Management

Safe money doesn’t mean no growth—it means no unnecessary risk. By combining guaranteed income sources (like annuities) with flexible, conservative investments, you can reduce volatility while still pursuing growth.

This balance between protection and participation helps keep your income steady, your savings safe, and your confidence high—no matter what happens in the market.

3 Simple Steps to Get Started This Month

Review your retirement risks.
Identify which risks (market, healthcare, taxes, etc.) could most affect your lifestyle.
Reallocate strategically.
Move a portion of assets into protected income solutions to balance growth and safety.
Meet with a financial professional.
Get personalized guidance to ensure your income strategy covers all five major risks.

Final Thoughts

You’ve worked a lifetime to build your retirement. Don’t leave your future vulnerable to risks you can prepare for today.

This Financial Planning Awareness Month, make it your mission to protect what you’ve built—because the best time to safeguard your retirement is before something unexpected happens.

‍ Written by Brent Meyer, founder of SafeMoney.com. With more than 20 years of experience helping families navigate retirement and legacy planning, Brent is committed to making financial education simple, clear, and trustworthy.

Disclaimer: This article is for informational and educational purposes only and should not be construed as financial, tax, or legal advice. Consult a licensed professional regarding your specific situation. SafeMoney.com is not affiliated with or endorsed by any government agency.

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