From a financial standpoint, your retirement really has two possible outcomes. One is that your money—or at least the income—outlives you. And the other is that you outlive your money.

Retirement is arguably the financial topic that commands the most attention from the media and the financial services industry. The most fundamental assumption of conventional wisdom about investing that most people will quote and believe is that as you approach retirement, you should begin moving out of “aggressive” stocks into “conservative” bonds and other fixed-income investments. For many, it’s their mantra.

This assumption is the premise behind target-date funds. This type fund is designed to reduce an investor’s exposure to stock and raise their bond holdings as retirement gets closer. The Investment Company Institute has said that around half of all 401(k) participants select such an investment for at least some of their retirement holdings.

But what if this strategy is wrong or just not right for you?

The strategy's fundamental premise is that your basic challenge of investing in retirement is reducing overall principal risk. Since bonds are believed to be a lot safer than stocks, in terms of assuring principal, they’re thought to be better for retirees.

I believe this premise is wrong. The more important challenge in retirement investing relates not to principal but to income. You don't take your account values to the grocery store every week; you take your income.

Over time, the price of just about everything you buy everywhere rises. At trendline inflation of the Consumer Price Index over a 30-year two-person retirement—trendline inflation being the long-term rate of inflation expected to occur after short-term fluctuations have passed—the cost of living has risen by nearly 2 1/2 times. At this 3% inflation rate, it will cost you around $2.40 in the 30th year of retirement to buy what $1 buys today.

It seems, then, that the most common-sense investment strategy for you in retirement is to invest for an income that historically has risen more than this cost of living.

Conventional wisdom is as powerful as it is, so it may surprise you that stocks have historically done that more reliably than bonds.

The U.S. stock market has returned close to 10% per year since 1928 versus 4.6% for bonds and 3.3% for cash, not adjusted for inflation and taxes.

As an example, the Bureau of Labor Statistics tells us that from the beginning of 1946 to the end of 2016, the cost of living, as measured by the Consumer Price Index, went up about 12 times. Standard & Poor's reports that over the same period, the cash dividend of its 500-stock index increased about 65 times. That is, it outperformed consumer inflation by more than five times. By the way, the Index itself—the principal value with which the conventional wisdom is obsessed—went up 150 times over the same period.

I don’t minimize the emotional toll that setbacks in your stock values can take, particularly for one who is retired. Nonetheless, overreacting to volatility and underestimating how much your cost of living may go up during your retirement could very well be game over.

It seems to me that if a retired investor were to check their dividend income as often as they check their account values, their experience of holding stocks throughout retirement might be a bit more comforting.

When you actually move into retirement, consider the following thought, as it may end up determining whether you outlive your money or it outlives you: People seriously underestimate how long they'll actually live in retirement and, therefore, how much their costs of living may rise over that long retirement.

Treat what can be a three-decade retirement as a joint problem of both maintaining your purchasing power, as well as protecting your principal.

Suppose you can reasonably anticipate the projected growth of your living costs breaking out over the growth of your anticipated income at some point. In that case, you may have some strategic decisions to make.

Put simply, a primarily fixed-income strategy investment strategy—focusing as it does on preventing your principal from fluctuating—may expose you to the long-term erosion of your purchasing power due to costs rising over time and may not sustain you through a long retired life with its rising living costs. Unless you have a really significant amount of cash to invest in them, having a portfolio primarily in fixed-income assets in a rising cost environment could find you having to consume your income, then consume your capital, and then still be alive.

If you study market history, you’ll see that stocks, as measured by their total return—growth plus any dividends—have, over time, consistently outperformed inflation by a mile, provided real returns net of tax and inflation well ahead of fixed-income issues and historically have moved higher in about seven of every 10 years.

So, if the share price moves bother you, ask yourself this: Am I paying far too much attention to random short-term movements in stock prices and too little to the relative steadiness of stock dividends in staying ahead of inflation?

If you're acting on your long-term plan to accumulate enough money to fund an independent retirement—meaning that you're adding money to your portfolio whenever you can—chances are also good that you're doing the right thing.

If you're already retired, and your withdrawal strategy removes far less than the mainstream stocks long-term historic compound return of about 10% annually, again the odds that you're doing the right thing are very good.

Michael Maehl is a retirement income specialist and Spokane-based senior vice president of Opus 111 Group LLC, a financial services company headquartered in Seattle. He can be reached at 509.944.1790.