There are three big issues to think about when investing in retirement.
The sequence of returns issue. Basically, this is the fact that not only do your returns matter, but WHEN you get those returns matters. Dealing with this issue should be one of the biggest focuses in any type of retirement planning.
Another major factor retirees need to deal with is the dragon of inflation. Far too few investors realize that their “opponent” in investing, both before and after retirement, isn't other investors or “Wall Street.” It's inflation, not inflation as measured by the government CPI, but their own personal rate of inflation.
As a retiree, withdrawal rates become much more interesting, since your current lifestyle is dramatically affected by your selected portfolio withdrawal rate. Pick a rate too high, and you're likely to run out of money before time. Pick a rate too low, and you may unnecessarily impoverish your lifestyle just to leave more money to your heirs, charity, and possibly even the IRS. The classic Trinity Study gave us the often-quoted “4% rule” but it is important to understand where that rule came from and what it means.
Investing Strategies in Retirement