Picture this: you’re 10-15 years from retirement, diligently contributing to your 401(k), dreaming of evenings on the beach or weekends in a cabin in the woods. But hold on, sunshine seeker, a storm might be brewing on your financial horizon. More than half of Americans are projected to run out of money in retirement, and the culprit? Traditional retirement plans themselves, thanks to a potent cocktail of market risk and withdrawal risk.

Times Have Changed, Folks:

Remember those rosy 1970s and 80s, where pensions reigned and markets seemed like a surefire bet? Buckle up, because those days are long gone. Today’s retirees face a different reality:

• Market Volatility: Gone are the days of predictable, steady growth. Today’s markets are a rollercoaster, with crashes and corrections lurking around every corner. Your carefully planned nest egg could suddenly shrink, leaving you scrambling.
• Lower Returns: Say goodbye to double-digit returns. Interest rates and bond yields are at historic lows, meaning your traditional plan might struggle to generate enough income to sustain you in retirement.
• Longevity Risk: We’re living longer! While that’s great news, it also means your retirement savings need to stretch further. Traditional plans might not be enough to cover your expenses for 20, 30, or even 40 years of retirement.

The Double-Edged Sword:

Now, let’s talk about the two biggest threats within traditional plans:

• Market Risk: Remember that rollercoaster? Every market downturn eats into your savings, forcing you to delay retirement or accept a lower standard of living.
• Withdrawal Risk: When you start withdrawing from your traditional accounts, you pay taxes. This double whammy – losing principal and paying taxes – can deplete your savings faster than you think.

So, What’s the Answer?

Don’t panic! This isn’t a retirement death sentence. It’s a wake-up call to modernize your approach–to get a risk-based plan. Here are some key strategies:

• Diversify, Diversify, Diversify: Don’t put all your eggs in one basket. Explore alternative investments like real estate, commodities, or even managed portfolios that can weather market storms better.
• Consider Guaranteed Income: Annuities or other guaranteed income streams can provide a safety net in retirement, ensuring you have a steady paycheck even if the market tanks.
• Seek Professional Guidance: A Retirement Risk Advisor can help you create a personalized plan that considers your risk tolerance, income needs, and unique circumstances.

Remember, retirement planning isn’t a one-size-fits-all game. By understanding the risks of traditional plans and exploring alternative strategies, you can take control of your future and build a retirement plan that’s truly stormproof. So, ditch the outdated thinking, embrace a modern approach, and get ready for a retirement that’s anything but a financial shipwreck!

Wondering how you can achieve this? We have a treat for you!

Sign up for our Getting Safely Through Masterclass! Learn about the risks you will face in retirement and what you can do today to get your best, safest retirement yet.