Risks during retirement are unexpected challenges that come up during a retiree's life. Most people are aware of market risks but longevity risks are important, as the average life expectancy is now 78-years-old, says Niklaus Whitaker of Tremont First Financial in Tremont, Illinois.
To protect against longevity risk, Whitaker plans for lifetime income streams, as there are more products out there now offering more flexibility. He also says it's important to focus on inflation risks and how it affect the power of a retiree's dollars, as inflation risks have an average of 3% historically.
There are options for retirees, says Whitaker, to include inflation-adjusted income products, which is something insurance companies are starting to plan for. These products increase income each year with the rate of inflation, so the retiree can maintain their purchasing power.