Many people are worried about their retirement from a money perspective. According to a survey by Transamerica, most workers think the financial challenges they’ll face in retirement will be harder to overcome than those that prior generations faced.

The dwindling number of pensions, the uncertainty of Social Security and the volatility of investments give credence to workers’ concerns about the time when they’ll no longer be working. Even many of those with substantial nest eggs saved worry that those want be enough, with healthcare costs and increasing longevity also relevant worry factors.

Given that list of unknowns, protecting what you have, and doing so by reducing your financial risks, is crucial to reducing your money-related stress in retirement, says Richard W. Paul,  president of Richard Paul & Associates, LLC and the author of The Baby Boomers’ Retirement Survival Guide: How to Navigate Through the Turbulent Times Ahead.

“You leave behind the security of a monthly paycheck and hope that your savings will be enough to pay your monthly bills, but there are certainly many unpredictable events that could go wrong,” Paul says. “Two of the worst things you can do when retirement planning is to depend on luck and to not consider future adjustments in lifestyle. 

“You can have a good retirement with common-sense planning that takes risk out of the equation and puts more relaxing into the time you planned to do just that.”

Paul lists four ways to reduce financial risks in retirement:

• Don’t lean on equity funds. Leaving your retirement account in a heavy allocation to equity funds subjects your retirement to what Paul refers to as “luck of the draw,” or investments being vulnerable to a bear market. “This is a common mistake,” Paul says. “The typical retiree spends their working years automatically investing a portion of their paycheck into their 401(k) or other retirement plan, but the problem is, they fail to make a change when approaching retirement. You want to reduce the risk of a major recession or lost decade ruining your retirement plan.”

• Factor in inflation. Inflation brings an especially adverse effect because it can erode the purchasing power of your savings. “In retirement planning, many don’t account for this, but the good news is inflation is not spread evenly among all types of expenses,” Paul says. “The costs of healthcare and rent tend to go up every year, but you can help bring other costs down, like entertainment. You can also keep some of your savings in investments that have historically kept pace with inflation.”

• Plan disciplined withdrawals and spending. Many studies of safe withdrawal rates assume a retiree spends annually 3 to 4 percent of the portfolio balance upon retirement. “But in the real world,” Paul says, “your spending will fluctuate, and you have the ability to decrease it when you need to. By monitoring your portfolio value and reducing your spending when market values take a dive, you can reduce your chances of spending down your savings too quickly.”

• Balance your portfolio. “You can’t assume a certain return amount on your portfolio every year due to the volatility of investment returns,” Paul says. “Reduce your risk by increasing the proportion of your portfolio that is invested in more conservative assets that are less likely to lose value. Add more predictable income streams, such as bonds.” 

“You want to exercise caution,” Paul says. “People are living longer and worrying more about their money running out. Protecting what they have requires careful planning well before retirement and paying attention to factors that require adjustments.”