The risk that your income stays the same while everything costs more. Over a retirement that might run decades, that gap compounds quietly. It's the risk people notice least because nothing dramatic happens on any single day — the number in the account doesn't change, it just covers less.
The Risk Nobody Watches
People worry about losing money and far less about money that slowly stops being enough. The second one is nearly invisible: your balance looks fine, your grocery bill doesn't.
Over a long retirement, the cumulative effect is one of the biggest forces acting on a plan.
Why It Bites Retirees Hardest
While you're working, income tends to drift up with costs over time. In retirement a lot of income sources don't, or don't fully. So the mechanism that used to offset rising costs isn't there any more.
It also hits unevenly — the categories retirees spend most on don't always move at the same pace as the general average.
Planning for It
The general idea is that a plan meant to last decades can't assume today's costs for all of them, and needs something in it capable of keeping pace.
What that should look like for you depends on your income sources and your tolerance for ups and downs. Worth working through properly, with your CPA on how the tax side interacts.
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