Throughout your adult life, you’ve probably saved for many different things. You’ve saved for down payments, vacations, college tuition and more. But the most important thing you’ve saved for is retirement—and that’s the one savings it would hurt the most to lose.
It probably comes as no surprise that most of us will eventually be forced to retire because our bodies, minds and energy levels simply can’t keep up with our job’s demands. If we don’t have retirement savings ready to supplement that loss of income, we’re going to be in big trouble. That’s why it’s so important to keep your retirement savings safe from all the risks that threaten it.
Five Risks to Retirement Savings
- Your friends and family: While your friends and family might not pose a malicious risk to your retirement savings, it’s very possible that they are a threat to it. After all, if your children or other loved ones lose their jobs or borrow money from you in an emergency, you’re leaving yourself open to losses of both investment gains and principal.
- Investment risk: Most retirees continue to be invested after retirement, but if they’re not careful, they might invest in positions that are overly risky or may not diversify their holdings enough to protect them from market downturns.
- Debt: Debt puts your savings at risk because you continue to spend money on interest charges. It’s a good idea to work hard to pay off all your debts before you retire and avoid taking on any new debt once you stop working.
- Fees: The fees and commissions in your various investments and accounts can slowly eat away at your principal.
- Interest rates: When interest rates on CDs, savings accounts, money markets and bonds don’t keep up with inflation, they put you at risk of outspending your savings during your retirement years.
It’s difficult, if not impossible, to avoid all risks, but forewarned is forearmed. Make sure you truly understand the various risks facing your retirement savings and then work with an advisor to come up with a plan to minimize them.
I used to check at least once a month, but since using BofA’s portfolio I’m fdining I check more often.The last charge I found, was an international charge some kind of cash advance in Japan, it was under $10 and I suspected someone was trying to figure out if the card number they had (probably from a CC# generator) would work.I called AMEX disputed it and changed the number, nothing has happened since then.I agree it’s important to watch charges, especially if you use your CC online. Also for online purchases I often use a temporary/generated number which expires after a few months, so no worries on the database storage of many online shopping sites.