My 6 financial worries in retirement -- how do I reduce the risks?

This podcast discusses the six financial worries a 60-year-old retiree has, including inflation, Black Swan events, and national debt. The retiree explains how he addresses these risks through strategies like a diversified portfolio, emergency funds, and delaying Social Security. He also outlines several factors that he believes are less worrisome, such as running out of money and healthcare costs, as they are accounted for in his retirement plan.

Inflation Concerns

• 00:01:30 High inflation can significantly impact retirement plans, potentially causing prices to rise by 6% annually over 35 years. The speaker believes the probability of this is medium, with inflation likely to spike occasionally. He suggests managing this through spending substitutions, like eating at home more, and by maintaining an 80/20 portfolio of equities to fixed assets.

Black Swan Events

• 00:01:30 Black Swan events, such as wars involving the US or significant power grid failures, can have a major impact on markets, economies, and the cost of living. The speaker thinks the probability is high, given the recent occurrence in 2020. To mitigate this, he maintains a financial buffer of 10 years of expenses outside of equities to weather any significant economic downturns.

National Debt Impact

• 00:04:48 The growing national debt and the cost of servicing it could potentially lead to a prolonged market downturn. The speaker feels the probability of this is high and manages it by keeping 10 years of expenses in a separate bucket. He believes the economy is resilient and will recover from potential downturns.

Company Bankruptcy

• 00:05:50 The speaker has a pension and deferred compensation with his former company, which are not guaranteed. He worries about potential bankruptcy, which would lead to the loss of both benefits. The speaker considers the probability to be medium and models this scenario when stress-testing his plan.

Social Security Changes

• 00:07:25 The speaker is concerned about potential changes to Social Security benefits. While he believes the probability of this is low, he's worried about policy changes that could impact his income in retirement. He suggests the only action is to vote, as he is uncertain about how to mitigate a potential policy shift.