What to Do When the Market Drops and You’re Retired (Or Close to It)

Kelly Jennings

Quick Answer

Market volatility becomes more significant near retirement because investors typically have less time to recover from major losses while also beginning to rely on portfolio income.

 

The Emotional Shift

Market downturns are unsettling for almost everyone. But for people who are retired — or close to it — they can feel different. When you’re no longer adding to your accounts but drawing from them, a down market raises a specific and legitimate concern: am I going to have to sell investments at a loss just to pay my bills?

 

If the answer to that question is yes, that’s a planning problem - not a market problem.

 

Retirement Changes the Equation

Once retirement withdrawals begin, large losses can become much harder to recover from. This creates emotional pressure that may lead investors to make reactive decisions.

 

At Branning Wealth Management, we build retirement income strategies that assume the market will go down. That’s not pessimism. It’s planning. By building a bond ladder that pre-funds several years of living expenses, we make sure our clients are never forced to sell long-term investments at the wrong time just to cover short-term needs.

 

This is the foundation of what we call a Safety-First approach to retirement income. The near-term income is protected. The long-term investments have room to recover. And the client isn’t making emotional decisions during a volatile market because the plan was built for exactly this scenario.

 

Why Planning Matters

When the market drops, the right response for most retirees with a well-structured income plan is: nothing. Stay the course. Let the strategy do what it was designed to do.

 

A retirement strategy should account for:

  • market downturns
  • inflation
  • healthcare expenses
  • longevity
  • income needs

 

Final Thought

Preparation, not prediction, is what makes a down market manageable.

 

If a rough stretch has you wondering whether your retirement income actually holds up, that's worth examining before the next one. Jason covers this in Ten Minutes Wealthier: Essentials — the episode on being built for the best case while protected for the worst runs about ten minutes.

 

And if you'd like to look at how your own income is structured, visit branwealth.com to learn more about how we work.

 

Disclosures:

All investing involves risk, including the potential loss of principal invested. This blog is distributed for general informational purposes only and is not intended to constitute legal, tax, accounting, or investment advice. Information in this blog is obtained from sources that we believe reliable, but BWM does not warrant or guarantee the timeliness, accuracy, or completeness of this information. Investment advisory services are offered through Asset Dedication, LLC, an SEC-registered investment advisory firm DBA Branning Wealth Management. Jason Branning, Kelly Jennings, Johnson Rhett, and Kristi Tidwell are investment advisor representatives of Asset Dedication.