These 5 Risks Affect the Wealthy Retiree More Than You Thought

These 5 Risks Affect the Wealthy Retiree More Than You Thought Bulman Wealth

Having a great deal of wealth to preserve might seem straightforward. However, the quantity and value of assets you have to safeguard create unique difficulties that are specific to their wealth. There are numerous wealth-preservation and investment principles that are applicable to everybody—for instance, establishing a tax policy, assessing a portfolio’s risk exposure, and more—however, there are critical dangers that arise when you have more money and more valuable assets to preserve.

You’re Being too Risk-Averse

When it comes to preserving a great amount of wealth, your instinct might be to air on the side of safety. Although safety will likely be a mainstay of your strategy, being “too safe” is also a risk! For example, if you leave your assets in a low-rate savings account, you’re leaving your money to erode from inflation. Even during a low-inflation period, 2% of 1,000,000 per year is $20,000 down the drain annually!

Collectibles Are Forgotten in Your Estate Plan

Investing in collectibles, such as rare or historic items or artwork, may provide good returns. Keeping up-to-date appraisals on record, however, is a common mistake among the affluent. Estate liquidity and taxes may be adversely affected by neglecting to take this important step.[1]

Having All Your Eggs in One Basket

Often time senior-level employees and executives of companies accumulate large stock positions in their firms over time. This creates a unique risk that puts a lot of your wealth at the whim of how this individual’s company performs on the stock market. You can speak with a financial advisor to determine how to diversify your equity in a tax-efficient manner to help mitigate this risk.

Doing Too Much on Your Own

Intelligence, hard work, and self-confidence are among the most important qualities for successful people. Those who are successful typically believe that managing a successful company is similar to managing a lot of money. Managing finances, however, requires a variety of knowledge and experience that might sometimes be too much for one person to handle. A financial professional may relieve you of the burden of handling so much money and assets while providing insights and expertise on how to potentially optimize assets.

No Cohesive Plan for All of Your Assets

Wealthy people often distribute their money in different financial firms or advisors, believing that they will get higher returns by diversifying their trust across institutions and by placing it in the hands of more attentive managers. However, key needs like risk management and tax efficiency may be lost in larger portfolios because there is no unified vision and strategy that can guide them in the right direction. Independent professionals who operate autonomously and with the best intentions may not produce the greatest results. A single institution that handles all your assets according to a coordinated, collective strategy can benefit you.

With increased wealth comes even more unique challenges beyond those covered here. If you’re looking to optimize your wealth management strategy, talk to us today to get started.


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Opinions expressed herein are solely those of Chris Bulman Inc. dba Bulman Wealth Group and our editorial staff. The information contained in this material has been derived from sources believed to be reliable but is not guaranteed as to accuracy and completeness and does not purport to be a complete analysis of the materials discussed. All information and ideas should be discussed in detail with your individual advisor prior to implementation. Investment advisory services are offered through Chris Bulman Inc dba Bulman Wealth Group, an SEC Registered Investment Advisor. Insurance products and services are offered through Chris Bulman, Inc. dba BWG Insurance Agency and Ameritas Life Insurance Corp., CA State Insurance License # 0M46922. Being registered as an investment advisor does not imply a certain level of skill or training.

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