Thanks to recent market volatility and the crash of 2008, most people planning for retirement are very aware of the risks their retirement portfolios face. But market risk is not the only pitfall in retirement planning.

Here are a few dangers that might not be in the forefront of people’s thoughts, but that could have a tremendous influence on their retirement.


Since 1982, there has been a decline of interest rates in the U.S. Combine that with the relatively low interest rates of the last couple of years and we have a real danger of today’s retirees underestimating the affect inflation could have on future purchasing power.

Here is an example of what just a 3 percent inflation rate would do to a household with $60,000 of expenses today:

15 years = $93,478 to cover expenses

20 years = $108,366 to cover expenses

25 years = $125,626 to cover expenses

No one knows for sure what inflation rates will be in the future, but ignoring or underestimating them could negatively impact retirement plans over time.

Long Term Care

It is understandable that most people do not want to think about spending any of their retirement years in a long-term care facility. But, if you are serious about creating a solid retirement plan, you can’t just stick your head in the sand and ignore this possibility.

While percentages will vary by study, the U.S. Department of Health and Human Services says 69 percent of people turning 65 this year will need LTC services during their lifetime.

The USHHS website also states the national average of a room for a year in a private facility costs $92,376.

It is important to have a plan to protect yourself, your spouse and your legacy against the possibility of an event you have no control over.

No clear vision of retirement

You are more than your portfolio. Spend time giving serious thought to what you want to accomplish in retirement.

Employment provides an arena for regular socialization as well as mental and physical activity on a weekly basis. How will you replace those hours in your week? What will motivate you in retirement?

Remember that setting goals for yourself should not end at retirement. Some people might be happy making sure they can travel at least once a month to see their grandchildren, while others might want to start a non-profit organization to support their favorite charity.

Your retirement plan should assist you in achieving your goals, not dictate them.

Luke Gawronski, a financial planner with Barnum Financial Group, is a registered representative of and offers securities, investment advisory and financial planning services through MML Investors Services, LLC. Member SIPC.