It's undeniable: retirement income is a crucial part of financial planning. Buzz terms like '401(k)' and 'high-yield savings account' immediately come to mind where these two heavy-hitters are concerned.

Gone are the days where retirees solely relied on social security benefits, pensions and financially stable offspring as safety nets for post-retirement bliss. Instead, diversified investments and moderate-risk portfolios are part of an ever-growing arsenal in preparation for the long-term, specifically life after age 65.

But here's the kicker: having one or two streams of income isn't enough to derail potential threats to your retirement plans.

There are a host of outcomes to consider when strategically placing your pennies. Here are three (3) retirement income concerns to prepare for while outlining your savings strategy and setting realistic retirement goals.

Running Out Of Retirement Funds

AICPA reports that their clients' top three greatest concerns when it comes to retirement are: rising healthcare costs, maintaining their current lifestyle habits and - you guessed it - running out of money.

Depleted funds during retirement aren't too far-fetched a possibility - no matter how well you prepare. A major factor that may chip away at your nest egg is inflation, which we’ll address later on. Another is the volatility of the markets you've invested in.

Imagine having a moderate or aggressive portfolio where there is a lot of room for growth. Similar to the market's potential to increase, there is also a very real risk that it will take a downward tumble at any moment. Market volatility may potentially leave you with significantly fewer funds than originally anticipated when it's time to cash out.

The best and safest course of action is to ensure that not all your eggs are in one basket. Consider using a financial advisor to guide you between saving options.

Discuss with them the multiple avenues available for investment that leaves room for growth, stability and liquidity.

Inflation Rates

Few persons account for inflation when thinking of lifetime income. However, the Federal Reserve's goal of an inflation rate of 2% in a quest to keep the economy thriving and balanced may not fare well for those who've budgeted for the present cost of goods and services.

To adequately measure the future cost of groceries, gas, vacations and household expenses, it's important to factor in a 2% annual inflation rate against the annual retirement income you've budgeted. For example, $50,000 in 2021, will not cover the same costs as $50,000 in 2051. In fact, taking into consideration an inflation rate of 2% over a 30-year period, a retiree who has determined they need $50,000 to meet annual expenses actually requires $137,298.

To understand the purchasing power of the future dollar and calculate how it steadily decreases over the years, consider using an inflation calculator or a retirement calculator.

Unexpected Medical Expenses

Life expectancy has increased between 1980 and 2019. The average American living in the United States can lives for about 78.9 years. Not only has the length of the average American life increased but the quality has improved as well. This

is reflected in the decision congress made to increase the age of retirement from 65 to 67.

Nonetheless, as exciting as the prospect of a long, healthy life for retirees is, the reality is not without risks. Ultimately, longevity risk - the risk attached to living longer - comes with a higher cost in the form of unforeseen medical expenses.

Regardless of how well we maintain our health, age comes with ailments. From major surgeries like hip and knee replacements to the rising cost of medication, pensioners can potentially dish out hundreds of thousands throughout their retirement years. Living longer increases the out-of-pocket expense associated with healthcare costs.

To prepare for the dent that medical procedures and aftercare can bring, consider contributing to a health savings account before retirement and during the working years.

Of course, it's difficult to add yet another account to the already diverse portfolios and investments that retirees pour into. However, declining health is one risk everyone will absolutely meet once retirement hits. An incentive to contribute to a health savings account is the tax-free benefit for qualifying medical expenses. Also consider that paying for healthcare out of pocket will consequently be a higher burden in the long run - both financially and emotionally.