Most retirement plans have not incorporated the longevity risk. Mortality risk is a risk multiplier that acerbates other retirement risks. Without mitigating mortality risk, many middle class retirees could exhaust their 401(k)s and be left with Social Security and a little equity in their homes. The possibility is based on the sequence of returns, the math principle of withdrawing from your retirement plan in down markets. The sequence of returns during that period of the Great Recession left some retirees reeling with cash shortages and a future some are still recovering from. Living longer may affect the quality of life because medical bills and long-term care costs will absorb discretionary dollars. 70% of seniors today use some long-term care assistance. Living longer will only compound the problem and the expense. If the baby boomer generation gets tight with their money, it could cause a rippling effect on the economy as spending grinds to a halt. Inflation is a real and ever-present danger to seniors. It doesn’t matter what the declared rate of the CPI is or any other inflation indicator, if it doesn’t include the commodities of life; it’s a worthless gauge. The purchasing power of your retirement dollar is   Read more…