There are 7 basic financial risks that many people face in their lives.
1) Dying too early can create economic problems for your survivors and beneficiaries as they may depend on your sources of income to make ends meet.
2) Incapacity & Disability are an often overlooked area which can devastate wealth whether by loss of income and / or by liquidation of assets to pay for healthcare costs.
3) Living too Long places a burden on your portfolio assets especially if you no longer work. If your portfolio assets can’t grow at the rate of inflation and produce your income needs you will start to deplete your wealth. Healthcare care costs can continue to climb and put pressure on your reserves.
4) Portfolio Risk (too much or too little) can damage a portfolio’s ability to recover and cause at best a reduction in lifestyle and at worst a complete loss of assets.
5) Legal Entanglements can be created by death, divorce, creditors, litigation and the like.
6) Improper Tax Planning whether it be by bad advice or lack of advice can cause you to overpay and in some cases be penalized for not making proper elections.
7) Opportunity Cost of managing each of the above risks in silos can cause various plans to work at best innefficently and at worst at cross purposes to each other. Coordinated financial planning can help establish priorities and goals and help ensure that all collaborators are singing from the same sheet of music.