Provided by RBC Wealth Management and Thomas J. Powers

The face of retirement is changing as medical advances are stretching lifespans and delivering longer and healthier lives filled with increased vitality. In this new, more dynamic era of retirement, recognizing and managing risks is crucial to having a happy, financially secure retirement.

A wealth management plan can help keep you focused on your goals and provide the foundation for managing risks by putting you in the driver’s seat of the aspects of your financial life you can control.

Market risk

While markets rise and fall regularly, low or negative returns can have a significant impact on a portfolio early in retirement. As you draw down assets, the effects from those early bad years may be amplified, leading to an earlier depletion of assets versus a portfolio that experiences challenging markets later.

Diversifying through a proper asset allocation can help protect against big market swings, balancing risk and reward for the long term. Inconsistent returns highlight the need to rebalance regularly to keep your asset allocation aligned with your long-term goals and evolving needs.

Behavioral risk

Experienced investors understand that volatility and market corrections happen from time to time. Yet an all too common emotional response is to sell stocks during down markets, to help minimize losses. However, behavior such as this can cause investors to lose money twice: once when they sell securities and once when they are no longer in the market to participate the following recovery.

Understanding how your emotions affect your choices may help you avoid making costly mistakes.

Inflation risk

Older Americans often experience greater effects of inflation, primarily because they require more health care and health care costs generally increase faster than inflation and cost of living adjustments. Aside from health care, a modest three percent rate of inflation will cut the purchasing power of your money to half of what it is today in 23 years.

Being invested for growth throughout retirement, making prudent withdrawals from retirement accounts and other assets and including lifetime income streams in your planning may help you enjoy a long and comfortable retirement.



This article is provided by RBC Wealth Management on behalf of Thomas J. Powers, a Financial Advisor at RBC Wealth Management, and may not be exclusive to this publication.  The information included in this article is not intended to be used as the primary basis for making investment decisions. RBC Wealth Management does not endorse this organization or publication. Consult your investment professional for additional information and guidance.

RBC Wealth Management, a division of RBC Capital Markets, LLC, Member NYSE/FINRA/SIPC

Investment and insurance products offered through RBC Wealth Management are not insured by the FDIC or any other federal government agency, are not deposits or other obligations of, or guaranteed by, a bank or any bank affiliate, and are subject to investment risks, including possible loss of the principal amount invested.