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title: Three Retirement Risks description: [AFW S.2.20] Investment Principle #20 published: true date: 2026-06-30T08:10:21.410Z tags: editor: markdown dateCreated: 2021-08-28T02:04:04.053Z

Watch 3 retirement risks, v1 VIDEO

Watch 3 Retirement Risks, v2 VIDEO

Watch 3 Retirement Risks, v3 by Dave McDanal VIDEO


Risk #1: Longevity

  • The risk is living longer than your money does.


The Stats

  • 10 Thousand people retiring daily.
  • 62 is the average retirement age.
  • 92 is the average age at least one spouse will attain for a married couple.
  • On average, 30 years is the time of income necessary for a couple.


The Solution

The solution to mitigating the risk of living too long is to invest in a collection of the world's great, mainstream, publicly-traded companies (mutual funds), and stay invested in 100% throughout retirement.


Risk #2: Inflation

  • Every year it gets more expensive to live on this planet!

  • Inflation is the "silent killer" - you don't notice it until it's too late.

  • For more on inflation visit Taxes & Inflation and Risk vs Inflation.


The Solution

The solution to mitigate the risk of rising costs is to invest in a broadly-diversified collection of the world's great, mainstream, publicly-traded, profit-seeking companies (mutual funds), and stay invested throughout retirement, and on to the next generation.


Risk #3: Volatility

Volatility is only a risk during the withdrawal phase, and only if the market is experiencing a downturn (25% chance). The underlying risk is called the sequence-of-returns



The Solution

This risk is mitigated NOT by using bonds or other low-return investments (that would exacerbate Risks #1 & #2), but by using an intelligent withdrawal strategy (equites + side-funds and/or variable annuity).