In this Episode of the Secure Your Retirement Podcast, Radon and Murs discuss why risk management in retirement planning goes far beyond just investment risk. While markets and portfolios often dominate the conversation, there are multiple retirement planning risks that can derail even the most well-thought-out plan. From income risk and tax planning risk to estate planning risk, liability risk, and the challenges of long-term care planning, this episode expands your perspective on what it truly takes to secure your retirement.

Listen in to learn about how overlooking risks like longevity risk, inflation risk, and sequence of returns risk can impact your ability to retire comfortably. Radon and Murs break down practical retirement strategies, including the three-bucket strategy, to help you build a comprehensive approach to retirement income planning and financial planning for retirement. If you’re serious about creating a solid retirement checklist and want to confidently plan for retirement, this episode is a must-listen.

In this episode, find out:

• Why risk management includes more than just investment risk in retirement planning
• How sequence of returns risk and income risk can impact your retirement income planning
• The importance of addressing tax planning risk and coordinating withdrawals strategically
• How estate planning risk and liability risk can affect your legacy and asset protection
• Why longevity risk, inflation risk, and long-term care planning are critical to planning retirement successfully

Tweetable Quotes:

• “When it comes to retirement, focusing only on investment risk can leave you exposed to the risks that matter most.” – Radon Stancil
• “A successful retirement plan isn’t just about growing your money—it’s about protecting it from income, tax, and longevity risks.” – Murs Tariq

Resources:

If you are in or nearing retirement and you want to gain clarity on what questions you should be asking, learn what the biggest retirement myths are, and identify what you can do to achieve peace of mind for your retirement, get started today by requesting our complimentary video course, Four Steps to Secure Your Retirement!

To access the course, simply visit POMWealth.net/podcast.

Here’s the full transcript:

Welcome, everyone, to Secure Your Retirement Podcast. Today, we got a topic I think is really, 

really important. We talk a lot about risk management. And what we wanted to do today is talk a 

little bit about the expansion of that. Not that we want to break everything down into the, hey, we 

got to manage all this risk, but we kind of do. And so, Murs and I were having a conversation. And 

one of the things that we get into conversations with people about is 

Risk management. And when we say that word, a lot of times what people think is they just think 

investments. That’s all they think about. We’ve talked about this. We believe that there are five 

critical areas to a successful retirement. And we call it the route to a successful retirement, 

R-O-U-T-E. And the R stands for risk. We are talking about risk. But yes, 

investments carry risk. And that is true. Markets are going to go up. Markets are going to go down. 

We need to make sure that we’ve got a good portfolio to make sure that we can manage that. 

We talk about that all the time on this podcast. We talk about our three-bucket strategy. We 

believe you should have a cash bucket. You should have an income safety bucket, and you should have 

a growth bucket. We’re really good at helping our clients manage risk. So, we talk to our clients 

about that investment risk and we’re actually saying, hey, that’s something that we can manage. 

But there’s other risks that we do talk about that sometimes people might not. put it into the 

category of risk. So, Murs, I know that this podcast is not about investment risk. 

This podcast is about all the other risk out there. So can you talk a little bit about, 

I know that you kind of have mentioned this a lot in different podcasts, but really this idea of 

around, I got to get income, and I need to have my income last. And how could that impact my 

overall plan? Right. Yeah. So, I think there’s a major one that gets thrown around in our industry a 

lot that is what’s called sequence of returns risk. And we’ve talked about this on our podcast 

before. It could be slightly related to the investment risk itself. But at the end of the day, 

in a nutshell, what sequence of returns risk is, well, first of all, it’s something we do not want 

to ignore. But what it is, is when we walk into retirement and we’re starting this withdrawal phase 

of life, the returns that we experienced in the first few years are going to be very determinant in 

a way of the success of our plan. So, I’ll give you an example. If you walk into retirement and just 

imagine for a second, let’s go back to say 2007. 

2007, from 2002 to 2007, the markets were doing pretty good. Your dollars are pretty in a good spot 

at highs per se, and then you retire, and we walk into 2007. 

2008 is when the end of 2007 going into 2008 is that big financial crisis that we had, 

and the markets crumbled for about 18 months. But you just retired, and you need money to live off 

of, and so you’re going to be withdrawing, unfortunately. while your assets are falling. 

And so, when we have withdrawal on top of market loss for a significant period of time, 

it can snowball that withdrawal rate. It can snowball the pressure on the portfolio. And the moral 

of the story here is it makes it very, very difficult to recover from that type of scenario. So 

sequence of returns risk is something that we want to be… for sure be paying attention to and 

trying to alleviate some of that risk can you get rid of it all together you can’t, but can you get 

it your dollar is somewhat compartmentalized so that we’re not as exposed to unfavorable market 

conditions when we do walk into retirement and start needing to use that money. We’ve talked about 

the buckets quite a bit. Raiden just referenced it too. That’s one of the ways that we avoid this 

type of risk. One that goes kind of hand in hand with it is our withdrawal strategy in general. 

So outside of the bucketing thing or outside of the bucketing strategy, we also really need to be 

paying to what types of assets we have, where we’re withdrawing from, and the taxation that’s 

involved with them, and then fully incorporating that with our actual tax plan. So, another example 

is maybe we don’t think far ahead enough in the calendar year, and we are withdrawing from our IRA, 

right? We’re withdrawing from our IRA and just building up that taxable income for the year. And 

then we also have maybe a stock scenario where we have to sell and we have a big capital gain that 

we weren’t expecting. Or maybe a mutual fund distributed a big capital gain. Or you sell a house 

and you knew you were going to sell that house, but we didn’t think about it as far as your win. 

strategy, and you’ve got a massive capital gain that can completely wreck your tax return. 

So, our withdrawal strategy, we want to be very much incorporated with what our tax year, our tax 

picture is going to look like. If we avoid withdrawal strategy, well, that becomes a tremendous 

risk as well. And that’s something year over year that we believe we should be looking at. So, kind 

of two blended together. One is around our sequence of returns. The other one’s around the type of 

withdrawals that we can be making. And if we’re not paying attention to both of those, we could run 

into issues. Another big one, though, Radon, that you talk about quite a bit is around estate 

planning. This can go in a lot of different areas, but what do you have there? I’m going to say 

risk number one is not having an estate plan. That’s the hugest risk. That’s the biggest risk 

because if we find ourselves in that scenario, you basically are letting the court decide who’s 

going to get money. 

that you have an estate plan. One of the biggest things that we added to our overall services 

really last year, two years ago, was helping our clients set up their estate plan and we made it a 

part of our overall service. Now, there’s different things to think about, though, when it comes to 

estate planning risk. I always have this conversation with people and I say, let’s just assume that 

I’m talking to a married couple. And I say, how do you have your estate plan set up? 

And they say, well, if something happens to me, it goes to my spouse and vice versa. Meaning we’re 

both our primary beneficiaries. That’s very common, right? All right. So, there’s a couple of things 

that we’re going to talk about on that, but let’s go number one. Who is your next in line? Well, 

they say, yep, this is the way this works. If something happens to me, it goes to my spouse. When 

something happens to my spouse; it goes to my children. So, let’s talk a little bit about what that 

risk could be. Most of the time, clients set that up where that it just puts them as the 

beneficiary, which means those children, if they were to inherit this money, are going to, 

or when they inherit this money, are going to get it lump sum. So, what are some problems that we 

need to think about when we think about risk management? Well, let’s think about a couple. One, 

what if they get this money, they inherit it, and they find themselves at this point, 

they happen to have had some type of an accident, or they find themselves in some type of a lawsuit. 

If we let this money go to them lump sum, it now opens it up and could expose it to that lawsuit. 

And that could be very, very difficult. What about this? What if I am leaving this money to my 

child and it’s not done properly? And let’s say that they are in the midst of… either considering 

or already in the midst of a divorce. Could it open those assets up? If it’s received incorrectly, 

absolutely. So, when I say this, I always kind of think it’s funny. 

I mean, almost every time I say this, I’m talking to somebody and they go, yep, I can see that 

happening. Or yep, I don’t like my in-laws, son-in-law or daughter-in-law. And I could 

definitely see that and definitely don’t want them getting half the money, right? I want to protect 

that so that it goes to my kids and then to my grandchildren if I’ve got grandchildren. So there 

are ways that we can set the estate plan up to be able to accommodate that. Let’s talk about one 

more, and then we’ll move into another risk. But here’s another one. We talk about that normal 

couple scenario where I’m going to leave 100% to my spouse. So now let’s assume that we’ve got an 

estate. I’m just going to use it, a $2 million. estate. It makes it easy math for me. 

Million dollars. And so, we are a married couple and we both feel that we have contributed and we 

are valued at half of the estate, right? Each of us own or possess a 50% ownership in this estate. 

So, we say, okay, well, what if I happens if I pass away? So now my million dollars is going to 

become total to my surviving spouse. So now they have all two million. You say, no problem. I love 

my spouse. I want them to have that money. And then that money is going to move on down to the 

children. What if they get remarried? If they get remarried, are there provisions in the estate 

plan, other than just the word of the surviving spouse that says your half of the estate could not 

go to the new spouse. It needs; you want it to go to your children. You’re okay with your spouse 

using the money while they’re alive, but you don’t want half of it going to the new spouse. There 

are provisions you can set up that put legal precedents in place that says when the surviving 

spouse, if they get remarried, they can have legal documents that say that those half of the funds, 

your half, has to be able to go to the children at the death of your surviving spouse. Just things 

to think about, things that you might want to consider, things you might want to be aware of. But 

there is another one, and the other one is, what if you get sued? And that’s really a liability 

risk. So, Murs, if you want to talk a little bit about that one. Yeah. So, liability risk, I think, 

gets ignored a little bit from time to time. And the thing is, is if you’re someone in that higher 

net worth category, you know, in that category being worth $1 to $15 million, you tend to get, 

I wouldn’t say targeted, but these scenarios could become detrimental to you if you do get sued and 

you don’t have proper protection. You know, a couple years ago, I was kind of reevaluating my auto 

and homeowners’ insurance and all this stuff. And I went with another program and they added in for 

me to get a discount on the policies. They added in an umbrella policy and, 

you know, a couple hundred bucks for a million dollars of coverage or something like that. Right. 

Now, at the time, I did it just to get the discount, but today I’m very grateful that I do have it 

because I have a son, I own a house, and people come over to the house. 

If something was to happen to someone on my property, I could be exposed, right? 

So, a lot of times our exposures are around auto accidents. If there’s not enough insurance 

coverage, well, then you become liable, or if there’s a lawsuit involved, 

the dollars start to rack up on you. Property related incidents, right? If you have a pool and 

someone gets hurt at your pool or in your house, or you’ve got people working in the house and they 

get hurt, you could be exposed. And then other types of personal liability claims can be all 

mitigated by umbrella insurance, but not just insurance. You may want to think about, you know, 

there’s plenty of you out there that have plenty, more than one property and you’ve got rental 

properties and maybe they’re all flowing through your name. Well, the question could be, does that 

make sense? And maybe we need some type of entity that could protect. us a little bit better, like 

an LLC or some type of other legal structuring. So, asset titling, legal structure, 

umbrella policies, these are all things that are rather inexpensive, but they can protect you. 

And hopefully you never have to use them. And the cost that comes with them, you’re not going to 

really worry about. But if you have to use them… you’ll want something like this in place, 

especially when it comes to the umbrella insurance. So, it’s one that gets, I think, 

ignored, but it’s one that could really create a lot of issues if we don’t have proper coverage and 

protection there. So, there’s some other ones out there, though. People are living longer and 

longer, right, Radon? So, what about longevity? Yeah, I’m going to lump in a couple of risks here 

together. Longevity risk, which means I’m going to live a long time, and then health care, right? 

So, both of those thing’s kind of come into play because if I… I have to look at it. Sometimes 

we’ll sit with people and we run our plans to age 90 as a default. And then I’ll have some people 

who will sit in those meetings and go, I’m never going to live to 90. And I got other people going, 

hey, I got a mom that lived to 100. In fact, we got a client right now. His mom just passed away 

three days shy of 101. And so, there are people today more and more living past 90. 

And so, we have to make sure that we’ve got a plan that can sustain a long life. Now, the other part 

that’s really connected to that is sometimes I live a long time, but those last five years, 

say, of my life, I’m going to not only have the fact that I’m living long and having those 

expenses, but I could be in a long-term care facility. And so long-term care is really something 

that we need to think about. I could have nursing home care. I could have assisted living. And I 

really had that three to five-year stint. And the reason why that’s a risk is we’re talking about 

$100,000 to $150,000 a year to live in that type of scenario. 

And so, we have to say, well, do I have that built in? Do I have something to help me be able to 

offset that risk? And we just think that’s really important to have that discussion. And we’ve got 

a multiple of scenarios to help people think through living a long life, good, 

also how to deal with that long-term care scenario and not doing it with the old traditional long 

-term care insurance. And we can look at those tools that we have to mitigate that risk. 

So, Murs, let’s handle one more here that I think is a, you know. Top of mind for everybody right 

now, and that’s inflation. Yeah, rather relevant right now. Going back to long-term care, I will 

say, I say this all the time in front of families, is that today we feel more confident in the 

tools around long-term care planning than what was available five to 10 years ago. 

So, it should be conversations that you’re having around long-term care. But anyways, on to 

inflation. Inflation is something we’ve been dealing with pretty heavily for the last six years now 

since the pandemic. And it seems like… to continue to be a problem. 

The dollars that you were spending 10 years ago are not buying what they were buying 10 years ago. 

And so, inflation risk is a legitimate risk that we need to build into the financial plan, 

right? So, when we’re running our financial plans, we run inflation right around 3%. 

So, we account for it. And so, we’re theoretically giving raises every single year and stress testing 

the portfolio and stress testing the plan to make sure that with these raises every single year, 

while that’s not truly going to be reality, can the plan sustain and what’s our risk around running 

out of money or anything like that? If we don’t account for that, then we’re going to have gradual 

erosion of our spending power. A dollar today is not going to buy five years from now what that 

dollar buys today. And so, we have to be planning for that type of thing, especially this ties back 

into longevity. People are living longer and longer. And so, inflation continues to grow and grow 

and snowball on us. And so, what we like about the bucketing strategy is that we’ve got a safety 

side that’s there for our cashflow, but then we’ve got our growth side that truly becomes a long 

-term investment to offset a lot of- inflationary risk. We get better growth on that side, but 

we’re not as worried because we’ve got our cash flow covered for a significant period of time. We 

could talk all day about inflationary risk, but that’s the gist of it. And everyone is feeling it 

right now. So, it’s definitely something we don’t want to ignore. So, I know we went through a bunch 

of different types of risks. Radon, why don’t you bring us home? Yeah. So basically, let’s recap. 

We talk about risk management. Here’s the things it includes. Investment risk. income risk, 

tax planning, estate planning, liability, longevity, and healthcare. That was what we covered 

today. If you are listening to this and you’re going, man, I didn’t really think about the risk 

that way. I’d like to have a conversation. Feel free to reach out to us. You can go to our website, 

pomwealth.net, go to the contact us page, fill the form out, and we’ll be glad to have a 

conversation with you around any one of these risks or anything you want to talk about. We’re 

always glad to have a conversation with you. As always, we thank you very much for listening. Have 

a great week. We’ll talk to you again next Monday