Risky business: Here are 8 costly retirement mistakes to avoid

Generating enough income in retirement calls for managing risks to that flow of cash. Retirement savers can't do that unless they know what those risks are. Financial planners identify these eight prime retirement income risks and provide guidance for reducing them.Dallas-based certified financial planner Scott Stratton offers this scenario: The market plummets 30 percent the year that you retire and you start withdrawing 4 percent annually from what was previously a $1 million portfolio.

One remedy suggested by Fort Worth, Texas, CFP Tim Estes, is to have a robust cash emergency fund to tide you over without tapping retirement accounts."If your expenses are $60,000 a year and you have $60,000 in a money market, who cares if the market goes down?" said Estes, founder and CEO of Estes Financial."Because it does come back.""This is a huge risk, as retirement is becoming longer," Stratton said.

To mitigate this risk, MacKenzie suggests delaying claiming Social Security benefits until the maximum benefit is reached at age 70."The longer you expect to live, the longer you should delay Social Security," she said.Although rates are rising, current fixed-income returns lag well behind historical norms. This provides a potent challenge to people seeking retirement income. Estes suggests high-dividend stocks as alternatives to puny bond yields.

Currently the safe percentage can vary, depending on whether a retiree expects other income from pension or annuities, MacKenzie says. Financial planning software uses simulations to produce more reliable figures in complex situations."We put all their assets and income expectation in there and show them with their existing strategy how long their money will last," she said.

Other retirement risks may also crop up. Estes sees future tax rates as a potential threat to savers with well-stocked individual retirement accounts and other tax-deferred accounts."Right now, taxes are at the lowest rates we've had in decades," he said.— By Mark Henricks, special to CNBC.com

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