Key Risks in Retirement
Understanding Five of the Key Risks
- Fidelity Consulting Services, 2010
- Assumes no employer-provided retiree health care coverage and life expectancies of 17 years for a male and 20 years for a female. See "Methodology and Information" for further details.
Methodology and Information:
Estimates are calculated for "average" retirees, but may be more or less depending on actual health status, area, and longevity. Assumes no employer-sponsored retiree health care coverage. Assumes retiree has traditional Medicare, elects Medicare Part D, and receives full government Part B subsidy. Assumes a health care cost inflation rate of 6.7% based on various service cost increases, ranging from 4% to 8%. Estimates are representative of amount needed in a taxable account. Assumes medical costs are incurred uniformly annually after age 65, and assumes an after-tax rate of return of 4% in retirement. Savings amounts do not include expenses related to over-the-counter drugs, dental care, nursing home care, or nursing home (long-term care) insurance.
Diversification seeks to reduce the volatility of a portfolio by investing in a variety of asset classed. Neither asset allocation nor diversification guarnatee against market loss or greater or more consistent returns.