Necessity is the mother of invention
Throughout the world the global financial crisis has many people reconsidering whether they can afford to retire. However, there are also those that have retired who have suddenly discovered that the capital invested in their own income stream can no longer fund their existing level of income without a substantial reduction in the term of their own pension.
Financial planners are wondering whether have made errors in the mix of the types of assets that are invested to align with the risk profiles of their clients. The financial planners are receiving numerous telephone calls from their worried clients who are concerned with the drop in the value of assets backing their pensions or their non pension related investments. It is if there is a wildfire burning through their life savings.
This is not unique to any country as it is a world wide occurrence.
Is a new way of looking at financial risk management required?
For many retirees who are homeowners who have been trapped by this financial crisis there will come the realization that they will need to change the way they manage financial risk in retirement. This may also require a reinvention of retirement and what it means to their finances.
Over the coming months I will look at this issue and what people can do to reinvent retirement and rescue their finances along the way.