#1 - Timing Risk
Would you want to leave your retirement Plans to chance?
The reality is, that simply being unlucky in the timing of your retirement - just picking a year to retire that's a bad one for stocks - can be the difference between your income continuing for years and years, or running out early. Don't leave your retirement to good or bad luck.
#2 - Inflation Risk
Your strategy for creating retirement income must seek to keep your income on pace with inflation.
The effect of rising prices can threaten a retiree's standard of living. For example, in 1980, the average price of a new car was $7,210. By 1989, it had increased to $15,400. And in 2017, the average new car cost $33,560. At a 3% rate of inflation, a retiree loses 25% of their purchasing power every ten years.*
#3 - Longevity Risk
Your strategy for creating retirement income should provide a "floor" of monthly income you can't outlive.
No retiree stops needing money. So a good question to contemplate is, "How long could my retirement last?" Think about the oldest person you know? Are they over 80? over 90? The fact is, a married couple age 65 has a 25% chance that the surviving spouse will live to age 98!*
*Source: USA Today, For your retirement planning, count on living until age 95, 10/5/2016