When people think about retirement risks, they usually name some obvious ones:

• Market downturns
• Rising taxes
• Inflation
• Healthcare costs

But there’s another risk that may be hiding in plain sight—one that can often derail even well-built retirement plans. That risk is human behavior.

The Fragile Decade

The years just before and after retirement are often called the “fragile decade.” It’s typically a period of enormous change.

Instead of a steady paycheck, you may be drawing down savings. Instead of adding to your accounts, you may be watching balances shrink.

This shift alone may create stress and anxiety. Add in market volatility, healthcare costs, or tax changes—and the pressure may only grow.

It’s no wonder why I feel so many retirees struggle with what I call decumulation anxiety—the fear that your money will run out before you do.

How Behavior Derails Retirement Plans

Behavioral economists have shown that people are not always rational when it comes to money. And retirees, with so much at stake, are shown to be no exception.

Some of the most common traps may include:

• Recency bias: Placing too much weight on recent market events. A few bad months feel like they’ll last forever.

• Loss aversion: The pain of losing money may feel twice as strong as the joy of making it, and that may lead to panic-sell during downturns.

• Confirmation bias: Looking for information that supports fears or hunches, while potentially ignoring evidence that says otherwise.

What may result? Common retirement risks like fear during a downturn, greed during a rally, selling low and buying high—and undoing years of careful planning.

The Anxiety of Decumulation

Even well-prepared retirees can unravel their plans under stress. A recent study found that:

• Nearly 25% of 401(k) participants put significant assets in cash.
• More than half did so out of fear of market losses.

But here’s the problem: staying in cash can mean missing out on growth. Over time, that may undermine your ability to sustain your lifestyle.

So, retirees may find themselves stuck between two fears:

• The fear of losing money in markets.
• The fear of not having enough growth.

I believe that’s the essence of decumulation anxiety.

Why Traditional Plans Can Fall Short

Many traditional retirement plans tie your lifestyle expenses to the performance of markets.

That may mean:

• When markets go down, anxiety goes up.
• When markets go up, greed tempts you to take more risk.
• When volatility hits, emotions drive decisions.

Advisors often try to solve this with behavioral coaching, talking clients out of fear-based selling or return-chasing. But if your living expenses are riding on the markets, the stress never really goes away.

A Different Approach to Retirement Risks

In our planning process, we attempt to take a different view:

• Your essential and lifestyle expenses should not depend on market performance.
• Market-based investments may still play a role, but not in funding your day-to-day life.
• When your income plan is stable, you can face markets with confidence instead of fear.

This may eliminate the need for behavioral coaching, because the behaviors that cause damage never get triggered in the first place.

Instead of coaching emotions, we strive to structure plans that make emotions less of a threat.

Bringing It Back to Real Life

Imagine two retirees.

• Retiree A has a traditional plan. Their lifestyle expenses depend on market withdrawals. When the market dips, they feel pressure. Should they cut spending? Sell investments at a loss? Stay in cash? Every decision may feel loaded with risk.

• Retiree B has a coordinated, comprehensive plan. Their lifestyle expenses are funded from stable, predictable income sources. Market performance matters, but not to their groceries, travel, or healthcare. They can enjoy life without second-guessing every headline.

Which retiree would you rather be?

The Bottom Line

Human behavior may be the hidden risk in retirement planning, but it doesn’t have to be.

With the right structure, you can strive to:

• Cover your lifestyle expenses without relying on market performance
• Avoid the stress of decumulation anxiety
• Stop worrying about fear or greed undoing your plan
• Live with clarity, confidence, and certainty

👉 Don’t let hidden risks control your retirement. Let’s design a plan that works with human behavior—not against it.