The words “risk” and “retirement” give many of us a bit of a jolt when we see them in the same sentence. We think immediately of market risk, losing an accumulated nest egg, and forces that might seem out of our control. But I’d like to remind you….if you KNOW AND UNDERSTAND the risks, they can not only be managed, but overcome! We isolate 5 critical risks to retirement for our clients, all of which are really timeless as it relates to where you might live, and in what time frame we are living (and planning through!).

The five risks are:

Market volatility risk, longevity risk, inflation risk, liquidity risk, and health risk.

Though I might be able to write a novel on this, here are a few brief and simple thoughts regarding each.

Market Volatility Risk:

This seems to be at the forefront in this era of market watching and instant information technology. Quite simply, market volatility risk is that which exists when assets (equities in particular) fluctuate or have the potential for substantial loss. It not only encompasses ups and downs, but the overall timing and sequence of the ups and downs. Diversification, Rebalancing, and proper asset allocation can begin to address this risk, but only an active plan and a well monitored portfolio can hope to come out on top with market volatility risk.

Longevity Risk:

This is the simple fact that, as we live longer, we truly need a far larger asset base to sustain a retirement than we did decades ago. In short, if one retires at 65, and lives until 95, you need to be sure that your assets are ready for 30 years of distributions!

Inflation Risk:

This is the basic principal that your money needs to out pace inflation, or you are truly devaluing. Lifestyle costs and basic needs ALWAYS increase in cost; make sure your plan factors this in.

Liquidity Risk:

Liquidity risk is not as often spoken of, but we believe it is critical to have assets that are immediately liquid for our clients, as ‘life happens.’ Too often, we see portfolios that have assets which are illiquid for clients, and when it forces you to sell the wrong assets at the wrong time to bridge a liquidity gap, it can have negative long term impacts on a portfolio and a retirement plan.

Health Risk:

This is a cousin of longevity risk, but health risk might also mean a loss that is not only far too premature, but completely unexpected. We believe in protecting client families for health risk using with sound insurance strategies.

Remember….all of the growth and gains in the world are of little gratification if you know you are unprotected. Understand your risks, and you will be one step closer to managing around them and achieving the retirement and lifestyle you’ve always envisioned! Risks can be managed, and the victory that results is our desired outcome to the financial planning process with our clients.


Amy Duncan, Alpine Planning Group

Written by: Amy Duncan, CRPC Investment Advisor Representative

Amy has been an advisor in the industry over 13 years and joined APG in 2009. She began her career in financial planning in her native Northern California after graduating from UC Berkeley. After joining the Management team for Woodbury Financial, she realized her true passion was in working with individual clients to build lasting relationships and create meaningful change for them.

Questions for Amy? Click here to contact Amy Duncan of Alpine Planning Group.