What If You Retire and the Market Drops?

If You Retire Into a Market Downturn, Here’s What Matters Most

What happens if you retire…and the stock market drops right away?

For many people approaching retirement, this is one of the biggest fears: retiring into a market downturn and being forced to sell investments at the worst possible time.

✅ Take the Free Retirement Readiness Assessment

📞 Schedule a Complimentary Call to talk through your retirement options with our team

It is not an irrational fear. It is one of the most important risks to plan for.

The issue is not that markets fall. They always have and they always will. The real risk is being forced to withdraw money from investments while they are down just to cover living expenses.

That is where long term damage can occur.

This is what financial planners call sequence of returns risk. But you do not need to know the term to understand the impact.

If you are within five to ten years of retirement and have built a meaningful portfolio, this is a conversation worth having.

Why a Market Drop Early in Retirement Is Different

When you are still working and the market drops, you are usually contributing to your accounts.

When you are retired and the market drops, you are withdrawing.

That difference changes everything.

Market losses combined with withdrawals can permanently reduce how long your portfolio lasts. Two retirees with the exact same balance can experience very different outcomes depending on when a downturn hits.

This is not about predicting recessions. It is about planning for reality.

A Smarter Retirement Income Strategy

The goal is simple. You want to retire knowing that if the market drops tomorrow, you know exactly where your income is coming from.

A well structured retirement income plan typically includes three layers.

1. Short Term Income Protection

Most strong retirement plans include one to three years of income in cash or conservative assets that are not tied directly to the stock market.

This gives you breathing room. It allows you to pay your bills without selling long term investments at a loss.

Think of it as buying time.

2. Reliable Guaranteed Income

The more of your essential expenses that are covered by predictable income, the more resilient your plan becomes.

This may include:

• Social Security
• A pension
• Rental income
• Other dependable sources

Claiming Social Security strategically can provide stability, not just higher lifetime benefits.

3. Long Term Growth Assets

Your long term investments need time to recover from downturns.

When you combine a cash buffer with guaranteed income and a clear withdrawal strategy, you give your portfolio the ability to participate in recoveries instead of locking in losses.

That is the difference between reacting emotionally and responding confidently.

If you would like to talk through your retirement income strategy or stress test your plan before retirement, you can schedule a complimentary conversation with our team.

Clarity reduces anxiety. Planning builds confidence.