Reasons Retirees Can End Up Broke During Retirement

People need to prepare when it comes to retirement. That way, when they do retire, they have saved up a considerable amount to allow them to enjoy a comfortable retirement. But even until then, there are certain risks that can affect how a retiree eventually fares at this point in life. There is that risk that the retiree can go broke and dry up the cash reserves and savings. There are many reasons for this. Here are some of them.

Unbalanced Investment Portfolio
Some retirees continue to invest some of their retirement fund in the hopes that it will earn some income. But this will require a careful check of the investment portfolio and how they are placed. Too much of a certain thing can come at a risk. An unbalanced portfolio can cause losses instead of winners. It can deal a considerable dent on what would be one’s retirement fund. If not addressed, it can even be a reason why a retiree can end up broke.

Extended Life Span
While long life may be considered a blessing, it can also be a curse for the unprepared retiree.  The extended number of life years can lead to added costs and expenses retirees never expected to experience. Eventually they, end up broke because they were not prepared to live that long.

Spending Too Much
It is simply the easiest reason why retirees end up broke during their retirement. Their spending habits end up reducing the retirement fund faster that it can compensate in terms of earnings. Eventually, the fund runs out and the retiree ends up broke. Without addressing these issues, it can be easy for an expected dream retirement to become a nightmare. Would-be retirees need to be aware of these potential problems and avoid them as much as possible.

 

Posted by Ardent Editor on Mar 17 2017 in Financial Planning

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