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The Biggest Risk To Your Retirement

People work hard to build their net worth. They build savings, increase assets, pay their mortgages, improve their home or even buy a summer home or cabin, invest in stocks, bonds, and other securities, and contribute to their retirement funds. As this net worth builds, how can it be protected? It is protected by addressing the biggest risk to its value.

That risk is not a decline in real estate, poor stock market performance, an increase in taxes, or even a spike in stagflation. It is the sudden, often dramatic, cost of long term care resulting from a health event. Those costs arise from the cost of the care itself along with the increase in living expenses resulting from a health event which requires that care be administered in a care facility.

When such health events occur, those not prepared for it face a crisis. They have to liquidate assets, often in an environment of declining market values, and spend their savings and investments to pay for their care expenses resulting from the health event.

The four most common health events are; heart attack, stroke, cancer, and Alzheimer’s disease. The next most common are; dementia, Parkinson’s disease, coronary artery bypass surgery, paralysis, coma, and kidney failure or other major organ failure. As we live longer and methods of medical treatment improve, the likelihood of having to spend dramatically larger amounts of money on long term care and associated living expenses increase even more.

Coupled with the increase in these costs, is the fact that typical investment returns and property values have not kept up the increase in these costs in recent years. Moreover, investment returns cannot be expected to noticeably increase at any time in the foreseeable future. To help protect against this, consider what assets, investments, and savings you simply cannot afford to lose, or choose not to lose. Then develop a plan which will address this risk. It will not only give you peace of mind, it will protect your piece of the pie, which is the net worth you have worked so hard to build.