Four Key Risks in Retirement—and How Thoughtful Planning Can Help Protect Your Future

As life expectancies rise and the financial landscape grows more complex, today’s retirees and pre-retirees face a range of challenges that can significantly impact long-term security. At Centauri Advisory Group, we believe proactive, disciplined planning is essential to help you navigate these risks with confidence.

Below are four of the most common retirement risks we see—and the strategies often used to help mitigate them.

1. Outliving Your Money

Medical advancements, healthier lifestyles, and improved longevity mean retirees today may spend 25 to 30 years—or more—in retirement. Planning for this extended timeframe is critical to help ensure you do not outlive your resources.

There are several approaches that may help support lifelong income:

• Annuities can be an effective tool for some individuals, providing predictable income for life.
• Delaying Social Security benefits may offer meaningful advantages. Benefits increase by approximately 8% per year for each year you delay taking them, up to age 70.
• Continuing to work during peak earning years can strengthen your Social Security benefit calculation, which is based on your 35 highest-earning years (adjusted for inflation).

A coordinated income strategy can help align these tools with your broader retirement goals.

2. Rising Medical Expenses

As Americans live longer, the demand—and cost—of health care and long-term care continues to rise. Without proper planning, these expenses can erode even well-constructed retirement portfolios.

Strategies that may help provide important financial protection include:

• Long-term care insurance, which can help cover the substantial costs associated with extended care needs.
• Health Savings Accounts (HSAs), which offer triple tax advantages when used for qualified medical expenses—contributions may be tax-deductible, growth can be tax-deferred, and withdrawals for qualified expenses are tax-free.

Integrating these tools into your retirement plan can strengthen your ability to manage health-related expenses without jeopardizing your overall financial security.

3. Changes in Markets

Market volatility is a natural part of investing, but it can be particularly unsettling as you near or enter retirement. Traditionally, portfolios become more conservative with age, reducing exposure to riskier asset classes and lowering the likelihood of significant losses during distribution years.

However, in periods of elevated inflation, maintaining a strictly conservative allocation can present challenges. Balancing the need for stability with the need for long-term growth requires thoughtful, evidence-based portfolio construction—one that reflects both your risk tolerance and your retirement income strategy.

A diversified portfolio designed around your time horizon and income needs can help manage risk while maintaining growth potential.

4. Inflation

The rising cost of goods and services is one of the most persistent risks in retirement. Inflation erodes purchasing power, meaning your assets must continue to grow—even after you stop working—to help maintain your lifestyle.

For many retirees, maintaining some exposure to growth-oriented investments such as stocks is essential for keeping pace with inflation. Additional tools, such as Treasury Inflation-Protected Securities (TIPS), can also help preserve purchasing power by adjusting returns in line with inflation.

A well-structured retirement strategy should account for both short-term income needs and long-term inflation protection.

 

We’re Here to Help You Navigate What Comes Next

Your financial life is always evolving. If anything has changed recently—or if you would like to talk through these risks as they relate to your own retirement strategy—our team is here to help.

Reach out to Centauri Advisory Group anytime with questions or to schedule a conversation. We look forward to assisting you in building a retirement plan designed to help protect your future.