Which risk should retirees be particularly aware of?

Retirees should be particularly aware of longevity risk, inflation risk, interest rate risk, and market risk because each of these factors can significantly impact their financial stability and quality of life during retirement.

Longevity risk refers to the possibility of outliving one's savings. As lifespans increase, retirees must ensure they have enough resources to sustain themselves for potentially many years. This risk emphasizes the importance of planning for a retirement period that could span two or three decades or more.

Inflation risk concerns the rising cost of living, which can erode the purchasing power of fixed income sources such as pensions or annuities. If retirees' income does not keep pace with inflation, they may find it increasingly difficult to cover basic living expenses over time.

Interest rate risk is particularly relevant for retirees who have bond holdings or rely on interest income. If interest rates rise, the value of existing bonds typically falls, which could negatively impact the overall value of a retiree's investment portfolio. Conversely, low interest rates can limit the income generated from savings and fixed-income investments.

Market risk involves the volatility and potential decline in the value of investments in the stock market. This risk can lead to significant losses, especially if retirees need to withdraw funds from their investment accounts during market