Preparing for Risks in Retirement

In this episode, Bill and Pete Bush take a deep dive into the various risks associated with retirement. Drawing from their ongoing studies for the RICP (Retirement Income Certified Professional) designation, they unpack key categories of risk that can derail even the most well-thought-out retirement plans. From longevity and health concerns to market volatility and public policy shifts, they emphasize the need for proactive planning, emergency buffers, and a realistic outlook. This is not about fear—it’s about readiness.

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⏱️ Episode Timestamps & Topics:

00:00 – Intro: Fasten Your Seatbelts
The episode takes off with a familiar aviation metaphor as the Bush brothers cue up a conversation rooted in both experience and education.

00:21 – Retirement Risks Overview & RICP Insight
Bill mentions their RICP studies and how this inspired today’s topic. Risks discussed include longevity, inflation, and withdrawal rate risk.

01:45 – Longevity Risk & The Illusion of "My People Don't Live That Long"
People often underestimate how long they’ll live. Life expectancy continues to rise, and the stat of a 65-year-old couple having a 50% chance that one spouse lives to 90+ is spotlighted.

02:53 – Longevity = More Time for Inflation to Hurt
Longer life means more years for inflation to compound. Staying active longer also often means higher expenses.

04:14 – Aging & Health Expense Risks
Health risks include long-term care, frailty, and even financial elder abuse. Health expenses are cited as the #1 cause of bankruptcy in retirement.

05:56 – Beyond Healthcare: Adapting Your Environment
From needing a stair lift to remodeling a home for accessibility, aging has unexpected costs. Elder financial abuse often comes from trusted individuals—not just scammers.

07:34 – Investment Risks & The Sequence of Return Trap
Sequence of return risk is explained in depth: how bad early market years can cause a retiree to “sell more shares” to generate income. Strategies like bucket planning and income “flooring” are discussed.

09:34 – Income Layers & The 7-Layer Dip Analogy
Each retiree’s income is like a layered dip: Social Security, pensions, investments, etc. Building the right layers is essential for long-term sustainability.

10:50 – Work-Related Risks: Forced Retirement & Reemployment
Many people plan to work longer than they actually do. COVID showed us that employer insolvency and sudden job loss can strike at any time.

11:50 – The Illusion of Control
The idea that we control all outcomes is often false. Surprise is the “mother of all panic,” especially in investments. A strong buffer (emergency fund) is essential.

13:34 – Family-Related Risks: Loss of Spouse & Surprise Expenses
Losing a spouse can lead to emotional devastation and a significant drop in income. Taxes change, Social Security benefits can decrease, and stress may impact health.

14:32 – The Goal is Awareness, Not Fear
Planning for these risks is just like buying insurance. You hope you won’t need it—but you’re covered if something happens.

15:02 – Timing & Policy Risks
Interest rate shifts can hurt lump sums from pensions. Laws change—like the SECURE Act—and future changes to taxes, Social Security, or Medicare could impact retirees.

17:29 – Planning for the Unknown
You can’t control everything, but you can create buffers. “Risk is what’s left over after you think you’ve thought of everything.” – Morgan Housel

18:30 – Don’t Worry Alone: Seek Guidance
The brothers encourage listeners to reach out if they feel uncertain. Asking the right questions—and having a trusted guide—can make all the difference.

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💡 Key Takeaways:

• Longevity Risk: Retirees must plan for 25–30 years of income.
• Health Risk: Medical costs are a top threat to financial stability.
• Investment Risk: Market downturns early in retirement can devastate income plans.
• Work Risk: Job loss or forced retirement is more common than people think.
• Family Risk: Losing a spouse can affect both emotions and money.
• Policy Risk: Tax laws and benefit changes can throw a wrench into plans.
• The Illusion of Control: Many risks are beyond our control—but buffers help.
• Worrying Alone = Risky: Get help. Don’t plan in isolation.

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🔊 Notable Sound Bites:

• "You want to live a long life, but you don't want to outlive your money."
• "The number one cause of bankruptcy is healthcare expenses in retirement."
• "You have to sell more shares each month just to get the same check."
• "Loss of spouse risk can affect you in multiple ways."
• "Surprise is the mother of all panic."

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📬 Resources & Contact:

• Website: www.runwaydecade.com
• Email Bill: [email protected]
• Email Pete: [email protected]