Understanding the risk factors that can come between you and your ability to retire how and when you want is an important step toward meeting your retirement goals. To help increase the likelihood that you’ll have the funds you need when you reach retirement age, keep these four risk factors in mind:

Risk Factor: Longevity

While none of us can predict how long we’ll live, as life spans increase, many people may spend more time in retirement than they spent working. According to the Social Security Administration, about 1 out of 3 65-year-olds today will live until at least age 90 and 1 out of 7 will live until at least age 95.

Risk Factor: Inflation

The longer your time in retirement, the greater the potential that inflation may erode your savings' purchasing power and impact your lifestyle. This makes it important for you to develop an income strategy to help outpace inflation and keep up with the increasing cost of goods and services. Consider this:

• A  dozen large eggs cost $1.37 in 2004; in 2024 the same dozen eggs cost $2.70. That’s an increase of 97% in 20 years.

Risk Factor: Market volatility

Today’s financial markets have become increasingly volatile and complex, which can create uncertainty for older Americans wondering when they’ll be able to retire and how long their retirement assets will last.

• A sudden market downturn may have a significant impact to investors who aren’t well diversified or don’t have time to wait out a market recovery.
• When creating your retirement plan, consider the impact a volatile market could have on your retirement assets. During your retirement years, the market could fluctuate dramatically during that time.

Risk Factor: Withdrawal strategy

Your withdrawal strategy – the rate at which you draw down savings and investment assets to pay for current living expenses in retirement – plays a critical role in determining how long your income will last. For most individuals, an essential part of retirement income planning is determining an appropriate withdrawal or spending strategy. This strategy may need to be flexible to account for the variation of the other risk factors in order to potentially meet your retirement goals.

Being aware of these risks can help you plan proactively and be better prepared financially for retirement.

Investment products and services are offered through Wells Fargo Advisors. Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC (WFCS) and Wells Fargo Advisors Financial Network, LLC, Members SIPC, separate registered broker-dealers and non-bank affiliates of Wells Fargo & Company.