Retirement risk

This article will be integrated with the Retirement spending series.

Pre-retirement risks
When planning for retirement, one of the most critical decisions is the age at which the transition to the retirement phase will begin. Recently, the age of retirement is becoming earlier than planned due to the following:
 * Decline in personal health
 * The need to take care of a family member
 * Unexpected job loss (due to the economy), which can lead to a lower earning potential at the most critical phase of retirement savings - just before retirement.

There is an expectation of retiring at the same age as one's parents. There is also an expectation that the standard of living will be the same after retirement as during the working phase. Things have changed. There may be a nasty shock when the potential retiree realizes that the number of years left to accumulate savings is less than planned; thereby forcing the need for increased savings.

Inflation and interest rate risks are important in both the pre-retirement and retirement phases.

The death of a spouse, which affects both married pre-retirees and retirees, can have a profound financial impact. It is important to have a plan specifically focused on the surviving spouse.

Debt reduction during the pre-retirement phase is another way to manage financial risk. This approach is not often utilized in the retirement phase, as it is not efficient for those who live long, or for a surviving spouse. Some debt reduction techniques are:
 * Eliminate all consumer debt
 * Save as much as you can
 * Pay off your mortgage
 * Cut back on spending
 * Invest a portion of money in stocks or stock mutual funds (? under debate in the forum)
 * Buy a product/choose plan option with guaranteed income for life (There are many options here, get advice in the forum.)

/////// Pre-retirement risks affecting your ability to save for retirement.

Examples: job loss, health/medical crisis, unanticipated expenses for children or parents, etc.

Post-retirement income risks
Examples: living too long, death-of-spouse induced loss of pension, high inflation, financial market meltdowns, etc.

Post-retirement spending risks
Examples: long-term care without insurance coverage, unanticipated expenses for children or parents, etc.

Society of Actuaries (SOA)
From the Society of Actuaries (SOA):
 * Post Retirement Needs and Risks. Research related to financial risks and needs after retirement
 * Key Findings and Issues–Understanding and Managing the Risks of Retirement, 2009 report.
 * Retirement Planning Software and Post-Retirement Risks, 2009 report.
 * Key Findings and Issues–Process of Planning and Personal Risk Management PDF, 2009 report.