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Retirement planning goes far beyond building a substantial nest egg. As our guest Amika Gordon from Coronation Fund Managers explains, successfully navigating your post-retirement years requires understanding three critical risks that could derail even the most robust financial plans.

The first risk—inflation—is aptly named "the silent killer" for good reason. At a 6% inflation rate, one rand today will only purchase 17 cents worth of goods in 30 years. This erosion of purchasing power can devastate retirement savings unless your portfolio consistently outperforms inflation. Amika emphasizes that equities have historically been the best asset class for beating inflation over extended periods, making them an essential component of any post-retirement strategy despite their volatility.

Longevity risk presents another significant challenge as medical advances continue extending our lifespans. Many retirees underestimate how long their savings need to last, often planning for 15-20 years when they should prepare for 30 or more. This extended timeline affects both portfolio construction and sustainable withdrawal rates, with research suggesting an initial drawdown of around 5% can maintain capital adequacy throughout a three-decade retirement.

Perhaps most overlooked is sequence of returns risk—the potentially devastating impact of retiring just before or during a market downturn. Since no one can predict market timing with certainty, portfolios need to balance growth potential with volatility management through careful asset allocation and diversification. This explains why financial advisors recommend different investment strategies for pre-retirement accumulation versus post-retirement income generation.

The conversation offers practical insights for creating resilient retirement plans that can withstand these often-underestimated threats. Whether you're approaching retirement or already there, understanding these risks and implementing appropriate mitigation strategies could mean the difference between financial security and running out of money when you need it most.

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