What is a Financial Risk Management Plan?

Financial risk can be frightening, especially when it comes to your retirement plan. That’s where a financial risk management plan comes in. A financial risk management plan looks at potential risks and finds ways to avoid them. And if they can’t be avoided, lessen them. Here are some ways that financial risk management consulting can […]...
David Roberts
August 15, 2022

Financial risk can be frightening, especially when it comes to your retirement plan. That’s where a financial risk management plan comes in. A financial risk management plan looks at potential risks and finds ways to avoid them. And if they can’t be avoided, lessen them. Here are some ways that financial risk management consulting can help you reduce the risk of your retirement plan. 

DEVELOP YOUR PERSONAL RISK TOLERANCE

In your retirement plan, your risk tolerance is likely to become lower as you near retirement. For the risks that you do take, you want to make sure that they are calculated ones. This will involve looking at the markets in a rational way and using research and common sense to guide your decisions. 

LEARN THE MATH

You will also want to learn how to read indicators and ratios such as the price to earnings (P/E) ratio. Learning these indicators will help you better understand the market and be able to plan accordingly. Financial risk counselors specialize in understanding these risks and how they might impact your retirement plans, and use this knowledge to build low risk retirement plans.

DIVERSIFICATION

A key aspect of keeping the financial risk of your retirement plan low is through diversification. Basically, don’t put all your eggs in one basket. It is good to hold a variety of different investments so that, if one loses value, other investments may remain the same or increase. This can lessen the risks associated with market changes, giving you peace of mind as you prepare for retirement

Financial risk management counseling is a great tool to use, since these professionals can look at your situation and help you create a diversified portfolio that meets your retirement needs.

WATCH FOR INFLATION

Inflation is another risk that could impact your retirement. Rising inflation rates can make your money worth less in the future than it is today. To protect against this effect, it’s good to consider investments that grow with inflation. Such investments may include stocks and Treasury-Inflation Protected Securities. 

Treasury-Inflation Protected Securities (or TIPS) are government bonds that have returns that vary with inflation rates, giving you compensation if inflation increases. Financial counselors can help you get set up with these investments, which will help to lessen the effects of inflation-related risks.

CHECK YOUR INVESTMENTS

While you may not want to check your retirement investments every day, it is good to review these long-term investments when major life events occur and/or at least once a year. When you do check your investments, it is important to consider if your risk tolerance has changed and adjust your portfolio if necessary.

CREATE A PLAN

Financial risk can be worrying. Luckily, with financial risk management you can identify your financial risks and responses so you can have peace of mind in your retirement plan. If you feel overwhelmed by the process, getting financial risk management counseling is a great way to get professional help customized to your situation and needs.

Why Hire A Retirement Financial Advisor?

Why Hire A Retirement Financial Advisor?

Planning for retirement can sound like a daunting task. There are many different ways to reach your financial retirement goals, and finding the best approach can be tricky. With retirement being a major milestone in most people’s lives, the pressure is even higher.

Early Retirement: What You Need To Know

Early Retirement: What You Need To Know

Early retirement might sound like an impossible dream. We all hope that if we work hard enough and save our money right that we can have a long retirement filled with travel and time doing what we love. There are many benefits of early retirement. It can allow you to relax and experience improvements to your health, and discover new opportunities to pursue the things you are passionate about.

Planning Early For Inherited IRA Distributions Matters

Planning Early For Inherited IRA Distributions Matters

There is no crystal ball for taxes or the future tax landscape, so waiting too long to begin your RMDs from an inherited IRA could result in adverse tax consequences. Coordinating the timing of your RMDs with tax factors such as anticipated income, deductions, and credits could help to minimize the negative impact on your inheritance.

Are You Including Social Security Income In Your Retirement Plan?

Are You Including Social Security Income In Your Retirement Plan?

Since Social Security impacts us all, it’s important that we stay informed about the reality of the program’s financial situation and the key role it plays in our financial lives. Its future impact on retirement planning should not be sold short. This applies to everyone, not just those who will rely heavily on their Social Security income to keep them from running out of money in retirement.

How To Achieve Financial Freedom

How To Achieve Financial Freedom

What is financial freedom? Financial freedom is the ability to make choices without high financial stress. For many people, it involves being able to choose whether they want to work, when they retire, and make purchases when they want. With financial independence,...

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Many have no financial plan for retirement. At Plan For Your Goals, my mission is to help both the newly retired and the nearly retired take control of their finances with an evidence-based plan so they can retire with confidence.

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