Investment Risk

Hidden threats to your wealth and lifestyle could be lurking.

Wealthy households must also consider potential financial hazards as they plan to sustain their assets. Some of these risks are not always obvious.

Illiquidity of assets. When the bulk of a household’s net worth is held in real estate or a business, a retirement transition may hinge on finding buyers or investors—and as illiquid assets are converted into cash, significant monetary value may be lost.

Investment risk. A 2017 U.S. Trust survey found that, on average, 60% of the wealth of high-net-worth retirees was concentrated in equities. Imagine the possible impact on the net worth of those households in a market downturn.

Family issues. Fragmented relationships with a spouse and children can also breed family financial conflicts. If one spouse dies, income can disappear, and joint filing status is lost.

An insurance shortfall. Customized underwriting may be needed to obtain policies with necessarily high levels of coverage.

Litigation. While medical professionals and business owners always live with this possibility, asset protection from creditors and “predators” becomes especially vital in and near retirement.