Retirement should be a time to enjoy life without constant financial worry. Yet many retirees and those nearing retirement overlook risks that can quietly chip away at the comfortable lifestyle they’ve worked so hard to achieve.

Understanding these risks and how to plan for them can make the difference between a secure, predictable retirement and one filled with unwelcome surprises.

1. Stock Market Turbulence

Market declines are part of investing, but they can feel especially threatening when you no longer have a paycheck to fall back on.

A short-term pullback is often just a healthy market correction, while prolonged downturns, or bear markets, can take years to recover from. A portfolio designed to produce steady interest and dividends can help shield retirees from needing to sell investments at a loss. If income covers your living expenses, market swings are less likely to disrupt your plans.

2. Recessions

A recession can worsen the impact of a bear market. Companies may cut dividends, reducing income for investors relying on common stock payouts.

To protect against this, it’s wise to balance your investments with income-generating assets like high-quality bonds (not bond mutual funds) and other fixed-income instruments. These generally maintain their payments unless the issuer defaults, a risk that can be managed through careful credit analysis.

3. Rising Medical Expenses

Healthcare is one of the biggest uncertainties in retirement. Even with Medicare, out-of-pocket costs for deductibles, co-insurance, prescriptions, and long-term care can add up. Planning ahead with supplemental insurance, Medicare Advantage plans, and long-term care coverage can help manage unexpected medical bills and minimize the need for large cash reserves. The goal is to prevent medical costs from eating into the income you rely on for everyday living.

4. Inflation

Even modest inflation can erode purchasing power over a retirement that might span 20 or 30 years. While fixed-income investments provide reliable payments, they don’t naturally adjust for rising costs. That’s why retirees should include investments with potential for growth, such as certain real estate holdings, business development companies, or high dividend-paying stocks. Reinvesting a portion of your income during good years can also build a cushion against inflation over time.

5. Taxes

Many retirees underestimate the impact taxes can have on their nest egg, especially if most savings are in tax-deferred accounts like 401(k)s or traditional IRAs. Future tax rates can’t reasonably be predicted, so tax diversification is key. Spreading assets across taxable, tax-deferred, and tax-free accounts — like Roth IRAs — provides flexibility to manage taxable income in retirement. Converting some tax-deferred savings to Roth accounts before or during retirement may help reduce taxes later on, but it’s best done with careful planning.

Building a More Resilient Retirement Plan

The foundation of a secure retirement plan is a clear understanding of how much income you need versus what you want.

Your essential expenses — the “I need” income — should ideally be covered by dependable sources such as bonds and other contractual fixed-income investments.

Additional “I want” spending can come from higher-yield or growth-oriented investments. If markets or dividends take a hit, discretionary spending can adjust without jeopardizing your core lifestyle.

Finally, remember that doing nothing is itself a risk. Regularly review your plan, ensure your income sources are stable and diversified, and seek professional guidance if needed. By addressing these five often-overlooked risks, you can build a retirement strategy that stays on track — no matter what the markets or the economy throw your way.