10 Financial Challenges You’ll Face in the First 10 Years of Retirement

Gabrielle Olya   Wed, September 27, 2023

You’ve created a plan, you’ve saved toward your goals and now you’re finally retiring. While you’ll ideally be in for smooth sailing at this point, it is possible that you will encounter some financial storms in your early retirement years.

The best way to weather these storms is to be prepared. Here are 10 financial challenges you’re likely to face in your first 10 years of retirement — and how to move past them.

1. Market Volatility

Even the best-laid plans can get derailed by market volatility.

“Retirees may experience significant market volatility in the first 10 years of retirement,” said Scott Neu, accredited investment fiduciary (AIF), financial advisor at Reinke Gray Wealth Management. “This can impact their retirement savings, especially if they rely heavily on investment income.”

To be able to ride out any volatility in the market, Neu recommends the following: “Diversification, asset allocation and periodic portfolio rebalancing can help mitigate the impact of market fluctuations. Maintaining an emergency fund for short-term expenses can also reduce the need to sell investments during downturns.”

2. Longevity Risk

“People are living longer, which means their retirement savings must last longer,” Neu said. “Outliving their savings is a common concern.”

To mitigate this risk, it’s important to have the proper withdrawal strategy in place.

 “Financial advisors recommend a sustainable withdrawal strategy, such as the 4% rule, which ensures retirees don’t deplete their savings too quickly,” Neu said. “Annuities or longevity insurance can also provide guaranteed income for life.”

3. Inflation

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