As we approach a new year, it’s vital to make necessary adjustments to achieve your retirement planning objectives. While we can’t accurately predict the future, we can introduce effective strategies that help safeguard your retirement savings against unforeseen events or market fluctuations. 

Here are essential aspects to consider, ensuring you manage retirement risks in 2024:

Broaden Investment Horizons

Diversifying your investment portfolio is fundamental. This involves allocating your funds across various asset classes such as stocks, bonds, real estate, and others. Diversification helps shield your retirement savings from excessive risk in any single asset class or market segment. 

Additionally, incorporating global investments can further diversify your portfolio, offering exposure to different economies and sectors. It’s also crucial to periodically review and rebalance your portfolio to maintain your desired risk level, as market fluctuations can alter your asset allocation over time. This proactive approach helps in adapting to changing market conditions while staying aligned with your long-term financial goals.

Establish an Emergency Fund

An emergency fund is vital at any life stage, but it’s particularly critical during retirement. This reserve can buffer against unforeseen financial demands, like unexpected healthcare costs or urgent expensive repairs. It’s wise to have about three to six months’ worth of living expenses in an accessible, high-yield savings account, but amidst the current volatile economy, we suggest upping that amount to at least 12 months’ worth of expenses.

Moreover, during retirement, your income sources are often fixed, making it more challenging to handle unexpected expenses without such a reserve. Having this emergency fund also means you won’t have to dip into your investment portfolio during market downturns, preserving your capital for when the market recovers. Additionally, as health-related expenses can escalate with age, an adequately funded emergency account provides peace of mind, knowing that you’re prepared for such eventualities. It’s also important to regularly evaluate and adjust the size of your emergency fund, considering changes in your living expenses and inflation rates, to ensure it continues to meet your needs effectively throughout your retirement years.

Evaluate Long-Term Care Insurance

In 2023, long-term care insurance costs range from $79 to $533 per month, with premiums varying based on factors like age, gender, and health. Long-term care costs without insurance can be substantial. For instance, monthly expenses could be $5,148 for home health aides or up to $9,034 for a private nursing home room. Considering that individuals over 65 have a 70 percent likelihood of requiring long-term care, and only 11 percent are insured for it, this insurance can be crucial in protecting your retirement savings from unexpected extensive care costs.

Having long-term care insurance offers more than just financial protection; it also provides peace of mind and ensures more choices for the type of care and the setting in which you receive it. It allows you to maintain some level of independence and reduces the financial burden on your family. Given the high likelihood of needing long-term care, evaluating your insurance options should be an integral part of your retirement planning process.

Collaborate with a Financial Advisor

Financial advisors can assess various risk factors that could impact your retirement, including market volatility, inflation, and changes in tax laws. They employ their knowledge to devise strategies to mitigate these risks. 

Furthermore, financial advisors can suggest practical ways to reduce retirement costs. This could involve advice on more cost-effective investment vehicles, strategies for tax-efficient withdrawals from retirement accounts, or guidance on managing healthcare expenses effectively. They can also help in revising your spending plans and budgeting to ensure that your retirement savings last longer.

CKS Summit Group – Your 2024 Financial Ally

As your life circumstances, goals, and market conditions evolve, it’s essential to periodically reassess your strategy and investments to stay aligned with your objectives.

Fortunately, you don’t have to navigate this alone. CKS Summit Group is here to assist in analyzing your assets and crafting the ideal retirement portfolio for you. Proactively assessing your financial health allows more time for any necessary adjustments.

We invite you to schedule a complimentary strategy session with us. Reach out today, and let CKS Summit Group support your retirement aspirations.