Planning for retirement? Consider these key risks

Retirement should be a time of financial freedom, enjoyment and spending more time with your family and close relatives, but without proper financial planning it can come with serious risks and consequences.

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Stian de Witt, head of financial planning at advisory firm NMG Benefits, shares five critical risks retirees face.

#1: Liquidity risk One of the biggest challenges in retirement is maintaining a stable income, especially when markets fluctuate, De Witt says. "Liquidity risk arises when retirees need cash for daily expenses but find themselves forced to sell investments at a loss during market downturns. To avoid this, it is important to maintain a portfolio with a Money Market or Income Fund that can weather temporary market dips without affecting long-term investments."

#2: Inflation risk Inflation eats away at purchasing power over time, making it essential for retirement income to grow beyond the inflation rate, especially after taxes and fees, he warns.