Factors You Can Directly Control

• Asset Allocation: While no one can predict market performance, you can take steps to be better prepared for the market's ups and downs. How much you save, where you save the money, and how you choose to invest it are up to you. Learn more about How to Invest: the Importance of Asset Allocation.
• Withdrawal Rate: How you withdraw from your savings — both how much and where from — can directly effect your likelihood of a successful retirement. It's important to help make your money last and not withdraw too much from your savings, too soon.

Keep in mind that there are several factors you can influence before you retire, such as the age at which you retire and your retirement savings. While the current value of any retirement savings isn't flexible, don't underestimate the potential value that can come from taking control of your savings going forward. For example, taking advantage of available tax-advantaged and taxable retirement savings opportunities that are appropriate for you can make a difference.

If you're already retired, you can control not just how you invest your savings, but also whether you have income from other sources, such as part-time work.

Factors You Cannot Directly Control, But Can Still Address in Your Plan

• Life Expectancy/Longevity: While you cannot predict how long you will live, planning for an appropriate length of time can help ensure that you don't run out of money when you need it most. Today there's a 50% chance that one member of an average, healthy 65-year-old couple will live to be 92 years of age. That means, the person who retires at age 65 will need approximately 30 years of retirement income, and even more if s/he retires early. Learn more about longevity risk and creating guaranteed lifetime income with an income annuity.
• Healthcare Costs: With medical advances and longer life expectancies, health care costs have risen faster than overall inflation. Regardless of your current health and family history, anticipating the costs of health care in retirement means you'll be better prepared for the unexpected. See What You Should Know About Healthcare Planning.
• Inflation: Some retirement funding sources will keep pace with inflation, while others won't. Social Security benefits typically rise as the cost of living increases, but many other sources of retirement income, such as fixed pensions, fixed annuities, or interest and dividend income from fixed income investments, generally do not keep pace with inflation. Other income sources such as pensions provide a cost-of-living-adjustment (COLA), and variable annuities and stock investments may provide income which can increase over time to help offset the effects of inflation. Proper asset allocation can help address inflation risk, as can substantial retirement savings, but be prepared still to ride the ups and downs of the market.