Risk

So far this spring, there has been some extreme weather around the country. From blizzards in the Rocky Mountains to historic levels of flooding in Houston, the real headaches come after the storms move out. Homeowners are left to deal with the aftermath of everything from trees crashing through their roofs to the destruction caused by water damage. The repair expenses from these unexpected damages can easily run into the tens of thousands and send homeowners scrambling for their insurance policies. To add injury to insult, some policyholders may discover their policy excluded certain events like flooding if they hadn’t purchased additional coverage.

On the other side of the spectrum are the insurance companies who are also impacted by these destructive storms. They have to be ready to quickly deploy teams of adjusters and representatives to assist their policyholders.  While their business model accounts for these types of events, they also hope the extent of the damage won’t exceed their projections.  An event of historic proportions can wreak havoc on their profit margins if the insurance payouts are larger than initially budgeted for.

Preparing for risk is a funny thing; you don’t need it until you do, and boy are you happy when you’re covered.  That’s why having a financial plan that doesn’t account for risk is like living in an area known for flooding without getting flood insurance.  Things happen unexpectedly, and like the weather, many of these situations are completely out of our control.  But you can take control by identifying potential risks and planning for them.  Some financial risks, like not having a tax-wise investment strategy, are more obvious than others, while some are harder to identify, like the impact of geo-political events on the global economy.

Regardless of the source of risk, identifying your exposure and the potential impacts are critical to a successful retirement plan.  If you’re not sure if all of the risks have been identified in your retirement plan, then maybe it’s time for a second opinion.  We offer complimentary, no obligation second opinion reviews to see if you are prepared for some of life’s uncertainties.  We’ll evaluate your current portfolio, discuss your long-term goals, and figure out how you can get there without exposing yourself to unnecessary risk.

Knowing you’re prepared for whatever stormy weather lies ahead, makes it easier to wait for the blue skies to return.