The 5 Key Retirement risks to consider

When it comes to retirement it is a major life transition and point of change – going from saving and building up assets to beginning to spend them and potentially no longer having the ability to generate new income.

As someone who has been advising clients in this area for more than a decade, a large part of the job is to help manage and mitigate the risks associated with this. Now it isn’t possible to simply eradicate all risk, but some are more harmful than others to a greater number of people.

Therefore, I have narrowed it down to what I consider to be the 5 key retirement risks as follows:

  1. Overspending
  2. Inflation
  3. Low Returns
  4. Health
  5. Delayed activity and experiences

Now let’s consider each one in more detail.


This might seem like an obvious one but is also sometimes tricky to navigate. In the early years of retirement people want to get the most of out life and their new freedom away from the working week. But going too hard too fast can lead to the potential for having insufficient funds to last throughout the remainder of a lifetime.


The tendency for prices to increase over time. This risk is what some of my peers describe as a destructor of wealth, and although it has been more prevalent in the media recently this often works in silence. Without the ability for income streams and capital to keep pace with or outperform inflation this can lead to one of two things – overspending or having to reduce your standard of living. This is why it is an important consideration for me at all times.

Low Returns

Achieving lower than expected or lower than required returns over the long term has the ability to cause significant issues such as depleting capital earlier than expected and leaving less for the future or needing to consider a reduction in immediate spending and reducing the immediate standard of living. Now we all know that it is impossible to predict the future, and whilst it would be lovely to be able to do so with the assistance of a crystal ball, but what you can do is allocate your capital accordingly so that you have the potential to mitigate this in line with your own needs.


They say that health is wealth and that without it your quality of life is drastically reduced or even shortened. I know this having seen people maintain their health and therefore ability to continue to have great experiences and great quality of life for many years, as well as those with health issues which has severely restricted their ability to do what they would have chosen had that not been the case. Whilst there are some things that may well be out of your control, this is an area where is the potential to make a conscious effort to lead a healthy and active lifestyle in order to maintain a good quality of life.

Delayed activities and experiences

You might be thinking why is this one of the biggest risks that people have in retirement. I guess this is one which comes from having seen other people’s experiences. Often with some careful thought and planning around their finances they have the ability to undertake some of the activities and experiences they had always wanted to, a bucket list if you like. But when people retire and have the freedom, sometimes they are hesitant to actually do these things and then before they know it for whatever reason it is no longer possible. So remember that life is for living, even in retirement – you don’t want to be sitting on your deathbed wondering what might have been.

If you want to discuss these or any other potential risks prior to or during retirement then please get in contact.