When people think about retirement planning, they often focus on three questions: How much have I saved? How are my investments performing? Will my money last?
Those are important questions, but they don’t capture the full picture.
Retirement planning involves several interconnected risks that can affect your financial security over the course of decades. A framework from Chris Heye, Ph.D., published in the Journal of Financial Planning, identifies four key risks: longevity risk, market risk, health risk and decision risk.
1. Longevity Risk
Retirement doesn’t come with a predetermined expiration date. The longer you live, the longer your savings and income strategy may need to support you.
A retirement plan that works for 20 years may look very different from one that needs to work for 30 or more. Longevity can affect everything from your withdrawal strategy to your Social Security decisions and how much you need to keep invested for future expenses.
2. Market Risk
Investment markets fluctuate, and those fluctuations can have a significant impact during retirement.
A major market decline early in retirement can be particularly challenging if you’re simultaneously withdrawing money from your portfolio. Inflation adds another layer of risk by reducing the purchasing power of your income and savings over time.
Market risk is often the risk that receives the most attention because it can be modeled and measured. But it’s only one part of the retirement equation.
3. Health Risk
Healthcare expenses can be difficult to predict and can substantially change a retirement budget.
More than 9 in 10 adults age 65 and older live with at least one chronic condition. Health changes can affect not only medical expenses, but also lifestyle, housing, caregiving needs and the amount of income a household requires.
A retirement plan should account for the possibility that healthcare needs may change over time — even when everything looks manageable today.
4. Decision Risk
Retirement isn’t one big financial decision. It’s a series of decisions made over many years.
When should you claim Social Security? How much should you withdraw from your portfolio? Which accounts should you draw from first? How should you respond to a market downturn? What happens if one spouse becomes unable to manage the household finances?
Decision-making can become more difficult as people age. Estimates suggest that roughly 14% of adults over 65 have dementia, while another 15% experience mild cognitive impairment. Research also suggests that households affected by cognitive decline can experience meaningful declines in net worth in the years before a diagnosis.
That makes decision risk an important — and sometimes overlooked — part of retirement planning.
The Risks Are Connected
The most important takeaway is that these risks don’t exist independently.
Consider a retiree who experiences a significant health event. Medical or caregiving expenses increase, requiring larger portfolio withdrawals. At the same time, the market declines. If that person also lives longer than expected, those larger withdrawals may have an even greater impact on their long-term financial security.
One change can create consequences across several areas of a retirement plan.
That’s why retirement planning should go beyond investment performance. A strong plan considers how longevity, markets, health and future financial decisions can interact — and creates strategies for adapting when circumstances change.
Your retirement plan isn’t just about making your money last. It’s about preparing for the many risks and decisions that can shape how you live throughout retirement.
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Bautis Financial LLC is a registered investment advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.
Market Recap Week of 9/8/2026 to 9/11/2026