Also known as point-in-time risk, timing risk considers the variations in sequences of actual events that can have a significant impact on retirement security. There are just some factors outside of your control. Depending upon when you retire, you may, for example, face high inflation or low interest rates.
The best way to understand this is to consider the following example. Patty retired in 1974. Because of high inflation in the years following, for every $1,000 per month of income in 1974 she required $3,379 25 years later (1999). Mary Lou retired in 1986. For every $1,000 per month she only required $2,064 25 years later (2011). For Mary Lou, prices only increased 206%. For Patty, prices over the same number of years increased 337%!
