Sequencing Risk and improving Health & Wealth Expectancy
Sequencing risk is an important investment theory to factor into a financial plan – WHY?- Because it is a risk most investors face and it becomes more imminent in the lead up to retirement and the first 10 years of living in retirement.
The ‘reader friendly’ definition of sequencing risk is :
- A significant market correction or economic crisis close to, or, within the first 5-7 years of retirement
- The frequency and timing of withdrawals from retirement savings, and the impact it has on the rate of return
Both have a negative impact on how long your retirement savings will last, it can reduce your wealth expectancy. The problem……it only highlights the impact of an economic crisis - What happens if you face a Health Crisis as well such as a CHADD (Cancer, Heart Attack, Alzheimer’s, Diabetes, Dementia)?
About (80%) older Australians (aged 65 and over) have at least one chronic health condition and 28% had 3 or more based on research completed by the Australian Institute of Health and Welfare. (Its funny that we consider age 65 ‘old’, the Okinawan’s, the longest, healthiest living people in the world are still considered in their ‘youth’ at age 70-80, and 100 is when they may start considering an invitation to heaven)
The impact of sequencing risk and CHADD cannot be understated, they are real and both can significantly impact the longevity of your health & wealth.
What do you do about it?
Take action and work towards achieving optimal outcomes in both health & wealth. Adopt the Double-Yolker philosophy Dr. John Tickell and I created and review our materials, giveaways, articles and interviews. You’ll find answers to your individual needs.
Here are some quick starters :
Health
Review Docs interview on the ACE Skills (Activity, Coping, Eating)
Get moving, exercise is powerful in protecting against CHADD, go for a walk right now for 20 minutes….and keep doing that everyday for the rest of your life
Wealth
Download our budget planner and review the choices you are making with your money (Tools/General Calculators/Managing My Money/Budget Planner)
Check how your super is invested to see if it is relevant to your life stage and financial goals
Get some advice to evaluate how your retirement savings are tracking to provide security both now and, in the future, factor the income you need as well as the capital withdrawals you may need to make for one-off expenses (renovations, holidays, cars etc)
Look at the answers from the perspective our Double-Yolker GPS Approach & the 7 Pillars - Dealing with Reality to help gain clarity – get started
The Goal : The Best Outcomes for Your Retirement In the Best Order
Life, be in It – Life, stay in It
Sincerely, Nick
Written by Nick Longo