The 7 Biggest Risks to Your Finances—And How to Build a Safety Net That Lasts

When most people think about financial planning, they jump straight to investing: “Should I be buying more stocks?” “Is the market going to crash?”

But after years of serving families, entrepreneurs, and professionals, I can tell you this: wealth doesn’t disappear because of one bad investment—wealth disappears because of many unmanaged risks.

That’s why at International Private Wealth Advisors, we are firm believers that as you grow wealth, you must also de-risk it. And there are seven risks, in particular, that quietly steal more wealth than market volatility alone ever could.

Below is a simple, practical breakdown of those seven risks—along with a five-layer shield you can begin building today.

Risk No. 1: Job Loss

Losing a job isn’t just emotionally stressful—it’s financially destabilizing. Most employers may offer severance but that’s not guaranteed because offering severance is not required per law. According to Fidelity, the typical severance is one to two weeks of pay per year worked.

With economic slowdowns, hiring freezes, and periodic layoffs, this is one of the most common and most ignored risks. And this is one that is especially prevalent now, with Business Insider reporting that the job market is almost as difficult now as it was during the Great Recession.

What to do: Start with the foundation—building an emergency fund. For some, that means setting aside three to six months of expenses. For others, especially those with variable income or dependents, it may need to be more. We like to recommend you put your emergency fund in a high-yield savings account.

Risk No. 2: Death of the Breadwinner

One of the most devastating financial events a family can experience is the loss of its primary income-earner.

Yet LIMRA reports that 42% of American adults are underinsured or have no life insurance at all, and many others rely only on the group policy at work—which often disappears the moment you leave that employer.

What to do: Make sure your family has adequate life insurance, in addition to any policies you might have through work. It’s one of the simplest and most affordable ways to protect your loved ones.

Risk No. 3: Disability

You are four times more likely to become disabled before age 65 than to die. Yet disability protection is one of the least talked-about areas of planning.

We tend to think we’re invincible—until one fall, one illness, or one accident proves otherwise.

What to do: Review disability income insurance options—especially if your family relies on your paycheck. Protecting your income is just as important as protecting your life.

Risk No. 4: Market Crash

The S&P 500 declines by 10 percent or more about every two years. Volatility is a normal part of investing—but fear of volatility leads many people to make the wrong decisions at the wrong time.

The markets are positive roughly 75 percent of the time, according to Barron’s, but those down years are what shake people’s confidence.

What to do: Invest wisely and consistently—don’t react emotionally. A long-term plan beats short-term panic every time. We’ll be teaching a full session on smart investing strategies in this workshop series.

Risk No. 5: Longevity (Outliving Your Savings)

We’re living longer than ever: Women live an average of 84 years, and men live an average of 79 years. And for couples, there is a 50 percent chance one partner will live to the age of 92.

Longevity is a gift—but it creates a new risk: running out of money while you’re still very much alive.

What to do: Use planning tools that account for long lifespans, inflation, and rising healthcare costs. Your money needs to last as long as you do.

Risk No. 6: Dying Intestate (Without a Will or Trust)

About 76 percent of Americans pass away without a will or trust, according to Caring.com. And when that happens, the state—not your family—decides what happens to your assets. Probate can take up to two years and cost your heirs about 7 to 12 percent of your estate

Plus, your estate becomes public record, which can open the door to family conflict and even fraud.

What to do: Create an estate plan—at minimum, a will and powers of attorney. Ideally, a trust to keep your affairs private and avoid probate altogether.

Risk No. 7: Identity Theft & Cyber Fraud

Identity theft has become one of the fastest-growing threats to your financial wellbeing, with 1 in 3 Americans experiencing some form of fraud and more than $12.5 billion lost in 2024 alone.

Technology has made our lives easier, but it’s also given scammers powerful tools to impersonate loved ones, mimic financial institutions, and prey on the vulnerable—particularly seniors and individuals who may be isolated. We’ve seen clients lose tens or even hundreds of thousands of dollars to romance scams, phishing schemes, and convincing impersonation attempts.

What to do: Protecting yourself now means practicing strong passcode habits, using encryption and identity-monitoring tools, and staying skeptical of any unexpected link, text, or call—especially those designed to trigger fear, secrecy, or urgency.

The 5-Layer Shield That Protects Your Wealth

I have a simple five-layer framework I use with my clients help de-risk their financial life, with each layer building on the one before it.

• Layer 1 is building an emergency fund, because cash provides immediate security against job loss, unexpected expenses, or rising debt.
• Layer 2 is creating an insurance fortress, ensuring that life, disability, health, home, auto, and liability coverage protect both your income and your assets.
• Layer 3 is investing wisely, using diversified, long-term strategies that align with your goals instead of reacting to fear or market noise.
• Layer 4 is establishing an estate plan so you can avoid probate, safeguard your legacy, and prevent needless stress or conflict for your loved ones.
• Layer 5 is practicing digital prudence, strengthening the security of your identity, passwords, and online presence—because prevention is always far less costly than recovering from a breach.

You can’t build wealth on an unstable foundation, and once you begin eliminating unnecessary risks, something powerful happens—your confidence grows, your decision-making improves, your stress decreases, and your wealth is finally able to grow without interruption.

As financial advisors, this is exactly what we want for every family: safety, clarity, and the peace of mind that comes from knowing you’re protected no matter what life brings.

If you need help reviewing your risks, insurance coverage, or legacy planning needs, our team is here to help every step of the way.

This material contains general information to help you understand basic financial planning strategies. Nothing in this article should be construed as a recommendation for your personal situation, nor should it be used to make decisions before you discuss your needs with your financial advisor.