Mark Henricks, an experienced business journalist, recently wrote an article that appeared on the CNBC website that noted that Financial planners have identified eight prime retirement income risks for those who’ve left the workforce. Here are several excerpts:

Generating enough income in retirement calls for managing risks to that flow of cash. Retirement savers can’t do that unless they know what those risks are. Financial planners identify these eight prime retirement income risks and provide guidance for reducing them.

  1. Timing: the risk you’ll retire during a bear market.
  2. Inflation: the chances that inflation will erode your purchasing power.
  3. Longevity: the chance you’ll outlive your money.
  4. Interest rates: the risk you won’t be able to get adequate returns on safer debt investments.
  5. Investor behavior: the risk you’ll dump stocks in a temporary downdraft.
  6. Withdrawal rate: the risk of taking out too much, too soon.
  7. Cognitive decline: the risk of becoming unable to manage your finances.
  8. Health-care costs: the chances of major medical bills.

Other key points made in the article are:

  • A big part of generating enough income to live off of in retirement is identifying and mitigating risks to that income stream.
  • Bear markets, interest rates and inflation can all wreak havoc on retirement income.
  • Physical and mental wellness, along with personal disposition and behavior patterns, also impact retirees’ financial decisions.

For much more on each of the 8 risks, continue reading