For decades, retirement planning is mostly about one thing: accumulating money.
You contribute to your 401(k). You invest. You save. You watch your account balance grow.
Then retirement arrives—and the entire equation changes.
Suddenly, you're asking your savings to do something very different. Instead of adding money every month, you're taking money out. And you may need those savings to help support you for 20, 30 or even 40 years.
That creates an uncomfortable question:
Could you run out of money in retirement?
No one can know exactly what the future holds. But a retirement income plan can prepare for some of the biggest risks retirees are likely to face. Here are five worth considering:
1. Living Longer Than You Planned
Living a long life is something to celebrate. Financially, however, it creates an important challenge.
Someone retiring at 65 may need their assets to generate income for several decades. The longer retirement lasts, the more years of withdrawals, inflation, healthcare expenses and unexpected costs your portfolio may need to absorb.
Planning only to an average life expectancy can also be risky. You aren't planning for the average person. You're planning for you.
A retirement income strategy should consider what happens if you live well into your 80s or 90s—and where your income would come from if you do.
2. A Bad Market at the Wrong Time
A market decline when you're 45 can feel uncomfortable.
A market decline shortly after you retire can potentially be much more consequential.
That's because you may be withdrawing money from your portfolio at the same time your investments are declining in value. Selling investments to fund living expenses can leave fewer assets available to participate in a future recovery.
This is often referred to as sequence-of-returns risk.
It doesn't mean retirees should avoid the market altogether. Growth can remain an important part of a long-term retirement strategy.
But it does mean retirees should think carefully about which assets will provide their income when markets aren't cooperating.
3. Inflation Quietly Eroding Your Buying Power
Imagine retiring with enough income to comfortably cover your lifestyle today.
Now imagine paying for that same lifestyle 15 or 20 years from now.
Even moderate inflation can gradually increase the cost of groceries, utilities, travel, insurance and other everyday expenses.
That's why putting every retirement dollar into the most conservative option available can create its own risk.
Retirement planning often requires balancing two competing needs:
Protecting the money you've accumulated while maintaining enough growth potential to help offset rising costs.
4. Healthcare Costs You Didn't Anticipate
Medicare can be an important part of a retirement healthcare strategy, but it doesn't necessarily cover every expense you may encounter.
Premiums, deductibles, prescription costs, dental care, vision care and potential long-term care needs can all affect a retirement budget.
Healthcare can also become more significant later in retirement—precisely when retirees may have less flexibility to return to work or increase their income.
Planning for healthcare isn't simply about estimating one number. It's about building enough flexibility into your income strategy to accommodate expenses that may change over time.
5. Relying Too Heavily on Your Investment Portfolio for Income
Social Security may provide one layer of income. Some retirees also have pensions.
But for many households, a significant portion of retirement income must come from personal savings and investments.
That can leave your lifestyle dependent on the performance of financial markets.
One question worth asking is:
How much of the income you need every month is predictable—and how much depends on selling investments?
There isn't one correct answer.
Some retirees may be comfortable maintaining greater market exposure. Others may choose to allocate a portion of their assets to strategies designed to generate more predictable income.
Certain annuity contracts, for example, may provide guarantees related to income or withdrawals. Those guarantees are subject to the terms of the contract and the claims-paying ability of the issuing insurance company. Annuities can also involve costs, surrender charges, liquidity limitations and other restrictions, so they aren't appropriate for everyone.
The goal isn't necessarily to eliminate investment risk.
It's to understand which risks you're willing to take—and which risks you may want your retirement income strategy to address.
Retirement Changes the Question
While you're working, the question is usually:
"How much can I accumulate?"
As retirement approaches, the question becomes:
"How can I turn what I've accumulated into an income stream that supports the life I want?"
That's a different problem entirely and it may require a different strategy.
A thoughtful retirement income plan can help you understand where your income will come from, how much flexibility you have, and how your strategy might respond when retirement doesn't unfold exactly as expected.
What's Next?
If you’re curious what your retirement actually looks like month‑to‑month, I’m happy to walk through it with you. No cost. No pressure. Just a straightforward conversation to see how income, expenses, and risk line up in real life, not just on paper. Schedule a phone or video call HERE.
Not quite ready to meet? I've created some guides you might find interesting. You can learn more and download them at the links below:
To your retirement,
Ben Harvey, RICP®
Annuities are best suited for long term investors. Some features may be available only by the purchase of a rider, an optional addition to an annuity or life insurance policy that is available for an additional fee. Withdrawals prior to age 59 1/2 may be subject to an additional 10% tax penalty. Surrender charges may apply. Guarantees are provided by the claims-paying ability of the underlying insurance company. Investing carries an inherent element of risk, and it is possible to lose principal and interest when investing in securities. Past performance does not guarantee future results.
