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GOBankingRates’ editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services – our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines<\/a> and our products and services review methodology<\/a>.<\/p>\n 20 Years<\/strong> Trusted by<\/strong> Many people work for several decades before they can retire<\/a>. Portfolios compound, earnings go up and people look toward the finish line as motivation to continue the race. Retirement is a marathon, not a sprint, but a few curveballs can catch some retirees by surprise.<\/p>\n Often, boomers end up depleting their portfolios<\/a> much sooner than expected. Proven models like the 4% withdrawal rule can go out of the window, and leave you vulnerable if you aren\u2019t careful. Below, we\u2019ll detail some of the risks to keep in mind as you plan for retirement.<\/p>\n<\/p>\n Rising Inflation<\/p>\n It\u2019s easy to forget about inflation surpassing the 4% withdrawal rule<\/a> before retiring. However, some people get caught by surprise regarding how much costs go up over time. High inflation is an issue, and it can erode your nest egg if you aren\u2019t careful.<\/p>\n Boomers may want to prolong their retirement so they have bigger nest eggs. A low-stress remote side hustle can also be a viable option. This income stream lets you generate more money while still enjoying the retirement lifestyle<\/a>.<\/p>\n Market Volatility<\/p>\n Market volatility is another curveball to watch. While many boomers reduce their risk when they retire, it\u2019s possible for the market to experience a sharp correction right before you retire. It could be even worse if the market plummets shortly after you retire.<\/p>\n The 4% withdrawal rule assumes your portfolio will go up by at least 4% per year. While that has historically held true, some years have been disappointing. For instance, the S&P 500 lost 19.4% of its value in 2022. High inflation and frequent interest rate hikes made it a difficult environment for investors.<\/p>\n It\u2019s hard to predict how the stock market<\/a> will move next. However, you can anticipate downward market swings by investing in assets with less risk. Mature dividend-paying companies don\u2019t get hurt as much during corrections as high-growth small-cap stocks.<\/p>\n Long-Term Care Needs<\/p>\n As you get older, you may need help doing basic things like laundry and going to the bathroom. Some boomers have to turn to expensive long-term care<\/a> service providers when they are older. They may have to resort to assisted living homes if a sibling or child won\u2019t take care of them at home.<\/p>\n<\/p>\n Long-term care costs can exceed a college tuition, and some people pay more than $10,000 per month for this service. Sadly, it\u2019s often necessary for those who\u00a0can\u2019t perform basic tasks and take care of a home on their own.<\/p>\n A Forced Retirement<\/p>\n The ongoing theme for dealing with retirement curveballs is to work a little longer so your money has more time to compound. Working additional years also lets you put more earnings into various assets.<\/p>\n However, some people don\u2019t have that option. If you incur a workplace injury in a hard-labor job, you won\u2019t be able to perform the same tasks anymore. While you may receive workers\u2019 compensation, you will have fewer ways to generate additional income.<\/p>\n![\"\"](\"https:\/\/cdn.gobankingrates.com\/wp-content\/uploads\/2023\/11\/icon-20.svg?webp=1&quality=75\"){kind=icon}
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