What investment planning consideration during retirement is related to the potential length of retirement?

During retirement, one of the critical investment planning considerations is the potential length of retirement and how it affects the sustainability of an investment portfolio. As individuals may live many years into retirement, it is essential to ensure that their assets will last throughout their lifetime. This consideration can lead clients to consider taking greater risks with their investment portfolios.

Taking greater risks can potentially provide greater returns, which is especially important for combating inflation—a significant risk factor during retirement. Since inflation can erode purchasing power over time, clients may need to engage in investments that have the potential for higher returns to maintain their lifestyle and purchasing power over a potentially long retirement period.

This strategic approach is particularly relevant for those who may have a longer life expectancy, as it emphasizes the need to grow the portfolio to outpace inflation and address future financial needs. Balancing this risk with the need for income and capital preservation is crucial, but the goal here is to avoid overly conservative strategies that do not account for the extended time horizon that retirement can entail.