In order to succeed, you must first understand the obstacles to overcome:
Top 6 Retirement Risks:
- Longevity risk – Outliving your money after retirement;
- Inflation risk – holding investments that do not protect your purchasing power;
- Taxation Risk – not maximizing legal tax shelter accounts & capital-gain investments;
- Insufficient Savings Risk – overspending on current personal consumption;
- Naïve Diversification risk – thinking you are diversified by investing in similar investments with different firms or managers; Ex. ABC Bank Balanced Portfolio + DEF Bank Balanced Portfolio;
- Emotional Biases – using emotional rules-of-thumb, or engrained prejudices, to short-cut thoughtful decision-making on money matters;
Top 5 Behavioral Bias Risks