Understand the risks you’ll face

Withdrawing from your retirement nest egg is a whole different animal than saving for it. That’s because the risks retirees face are fundamentally different. It’s not just about protecting your assets from market volatility. It’s about the possibility of outliving savings, inflation, withdrawing money in a down market, and more. Here, we’ll help you understand the potential headwinds, so you can help keep your retirement financially on track.
Retirement Risks Video Screen Shot

Understanding risk: Elisabeth’s story

View From the Top

My concerns for the future? The major one, I think: am I going to outlive my retirement account, am I going to then become a burden on my children? Trying to maintain my financial independence is a big concern of mine.

As the 20-year-old Lis, I and my husband then made some really good decisions for the future. When we first started saving with TIAA, basically what we decided was, all right, we'll put as much as we can into retirement, and actually that was the full amount. I moved money into TIAA rather than some other option I might have had.

I've had two big reviews with TIAA where they've actually looked at my budget and told me how things are going, reassured me that I would have enough money even without selling the house, which was very nice because I really like this house.

By the numbers

Percentage of Americans who do not know how much income they'll have each month after they retire.

Source: 2016 TIAA Lifetime Income Survey

Longevity risk

Consider planning for income you can’t outlive

Thanks to modern medicine, people are living longer than ever before. The downside is that this increases the potential risk of outliving your retirement savings. Think about protecting yourself by creating a guaranteed income stream that you cannot outlive through a fixed annuity to help cover essential expenses. This is also known as creating a retirement income floor.  Please note that guarantees are based on the claims-paying ability of the issuing company.

How to build a retirement income floor

Step 1 Figure out what your essential needs are and how much you will need to cover these expenses each month.
Step 2 Determine how much is covered by your income sources, such as Social Security or defined benefit pensions.
Step 3 Annuitize a portion of your savings into income you can’t outlive to help fill the gap.
Step 4 Allocate the balance of your savings appropriately to help pay for discretionary expenses while helping keep pace with inflation.
By the numbers
Sequence of return risk

Learn about the risk of bad timing

The market’s performance in the early years of retirement can significantly impact the longevity of your investment portfolio. This is known as sequence of returns risk—the chance that your investments will provide low or negative returns at the beginning of retirement when your portfolio is at its largest. A thoughtful income plan can help mitigate the risk of getting retirement started off on the wrong foot financially.
Market risk

Don't let market volatility get you down

How your assets are invested in retirement can help you weather the markets ups and downs. Being too conservative, too early could cause you to run out of money prematurely. And being too aggressive increases your exposure to market volatility and the possibility of losing money. Strive for a well-diversified portfolio. One that includes a reliable source of income from an annuity can help you fund the lifestyle you envision, and help keep the market from derailing your long-term plans.
Inflation risk

Don't forget about inflation

Food, medical care, transportation and recreation are likely to cost considerably more 20 years from now than they do today. One way to consider reducing the impact of rising prices is to keep a portion of your portfolio in investments with growth potential, such as equities. However, you may want to balance this with your exposure to market volatility and the risk of investment losses.
By the numbers

Inflation’s effect on purchasing power

Inflation can really shrink the buying power of your money over the long term. Notice the effect different inflation rates have on the prices of common expenses over a 20-year period nationally.
Source: Bureau of Labor Statistics, U.S. Inflation Calculator.  2,4
Withdrawal risk

Consider tapping into retirement savings carefully

There is a real risk of drawing down your assets too aggressively to meet your spending needs. To help avoid depleting your assets too quickly, think about pairing a guaranteed lifetime income floor with a flexible withdrawal strategy that is monitored regularly and adjusted for changing conditions.
By the numbers

Percentage of Americans with kids who have no will in place.

Source: RocketLawyer.com, 2014.  2
Cognitive risk

Maintain a sense of control

Financial skills are often the first loss in aging. If cognitive impairment is a concern for you, a combination of an income plan that guarantees your basic needs are covered and an estate plan can help safeguard your assets. You may want to consult with your legal and tax advisors about your estate planning needs.
Healthcare risk

Keeping up with healthcare costs

If not properly managed, rising health care costs coupled with living longer in retirement can cause big trouble. So make sure to plan for increasing costs, and maximizing your benefits and savings opportunities.
Read More
By the numbers


The average amount a retired couple with high healthcare expenses may need to cover healthcare costs for the rest of their lives.

Source: Employee Benefits Research Institute, 2017.  5
Next Steps

How TIAA can help

Lifetime income

Investigate income options that can help create lifetime income to help realize your retirement lifestyle.

Investment strategies

We can help you align your asset allocation strategy with your long-term income needs.

Don’t go it alone

We can help you create a retirement income strategy that factors in your concerns, as well as your goals.

Get in Touch

Talk with a TIAA Consultant to help you shape your overall retirement strategy and to help you consider the next steps.


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1 National Association of Theatre Owners. Feb. 8, 2018. http://www.natoonline.org/data/ticket-price/
2 Bureau of Labor Statistics. Feb 8, 2018.
3 United States Postal Service. Feb. 8, 2018
4 “Consumer Price Index Data from 1913 to 2017.” U.S. Inflation Calculator. Feb. 2, 2018 http://www.usinflationcalculator.com/inflation/consumer-price-index-and-annual-percent-changes-from-1913-to-2008/
5 "Savings Medicare Beneficiaries Need for Health Expenses: Some Couples Could Need as Much as $370,000, Up from $350,000 in 2016 ." Employee Benefit Research Institute Notes. December, 2017. https://www.ebri.org/pdf/notespdf/EBRI_Notes_v38no10_22.pdf
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You should consider the investment objectives, risks, charges and expenses carefully before investing.  Please call 877-518-9161 or log on to www.tiaa.org for current product and fund prospectuses that contain this and other information.  Please read the prospectuses carefully before investing.
Annuities are designed for retirement and other long-term goals. If you choose to invest in the variable investment products, your money will be subject to the risks associated with investing in securities, including loss of principal.  Withdrawals of earnings from a retirement account or an annuity are subject to ordinary income tax, plus a possible federal 10% penalty if you make a withdrawal before age 59 ½.
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