When I ask people how their retirement plans are coming along, I quite often get this blank look. The idea is so far away in the parking lot that it just doesn’t seem a priority. As mentioned in my\nprevious blog, retirement ideally should be by design and not by default. \nSo let’s look at some of the risks when you leave it up to fate.\nINFLATION\nYou may have noticed from the cost of a monthly transit pass, tuition fees, or a loaf of bread, that our cost of living has gone up. Even my favourite box of cereal shrank, yet the price stayed the same. These are all examples of inflation eroding our purchasing power. \nALL EGGS IN ONE BASKET\nWe know from the great recession, which started in 2008, that people are more fearful of the stock market. But with inflation eating away at your retirement income, there needs to be a diversified approach to saving for now and retirement. Historically, equities have provided long-term protection against inflation. So think twice about putting all your money in a savings account or GIC. \nDRAW DOWN RATE\nIt’s been written in the media that four to five per cent is the optimal level of withdrawal from your nest egg, one that will likely sustain your retirement lifestyle. That may or may not be your number, depending on what you plan to do in retirement. There are people who have “retired” but have stayed active in the community and still do some consulting work on the side, thus four to five per cent makes sense for them. Does it make sense for you?\nHEALTH CARE\nI was at a MedEdge summit in Richmond Hill, Ontario, recently to hear various speakers in the life sciences field talk about the cost of caring for patients. These experts were talking about having to find more creative ways to deliver health care due to the aging demographics and rising costs. Expect to see more fees and charges for services that were previously “free.”\nLONGEVITY RISK TO RETIREMENT\nMen and women are living longer in Canada and, if you are a couple living together, the chances of at least one of you living past 90 years is 63 per cent. Hence, my choice for the title for this blog. \n\n\n Questions to ask your financial planner\n \n “What is my cross-over date?” \n There is a reduction in the Canada Pension Plan (CPP) retirement benefit where the payments start between ages 60 and 65, and you get a higher benefit if you start between ages 65 and 70. Individuals may ask their financial planner for advice as to the optimal date to start receiving the CPP benefit. The “cross-over” point is a useful financial planning tool that I use for my clients.\n “What is the Old Age Security (OAS) clawback and how can I avoid or minimize it?” \n OAS is paid back (clawed back) to the government once your income is above a certain threshold ($71,592 in 2014). I have run across some seniors who have lost some of their OAS benefits due to poor tax and investment planning. \n \n These five risks to a comfortable retirement lifestyle are very real and we all need a plan to navigate around them. Thus, it is very important to sit down with your financial planner, or even get a second opinion, to give you peace of mind that your money won’t run out. \n Disclaimer\n The views and opinions expressed in this article are those of the author and do not necessarily reflect that of Chartered Professional Accountants of Canada (CPA Canada).