Market volatility can be uncomfortable for any investor – but for retirees, it can hit a little harder. With your income generating years behind you, and a greater reliance on investment income, retirees and those close to retirement may face anxiety when markets take a dive.
But volatility doesn’t have to derail your retirement.
“We all lived through COVID (when markets dropped) and that was only five years ago,” says Grant Conroy, Portfolio Manager/Partner at Genus. “When there’s a pullback, you learn to not make wholesale changes. It’s as simple as that.”
Of course surviving a volatile market isn’t just about riding it out – your outcome will also depend on how well you planned for the ups and downs, and how well you’re able to stay calm while staying the course. Here are some tips for weathering market storms in your golden years.
Plan for the ups and downs
Markets fluctuate, that’s inevitable. And it’s why the retirement planning process includes assessing your comfort with risk – and accounting for it within your portfolio.
The higher the level of risk you accept, the more your portfolio will move with the ups and downs – and in recent months, we’ve seen some real swings. But if you’ve planned well, market movements shouldn’t have an impact on your lifestyle from month to month.
“The markets will have good and bad months through almost everyone’s retirement years,” Conroy says. “When you’re planning, you bake in a cushion, so if one month is down quite aggressively, it’s not like you’re going to stop your retirement and go back to work. You have an idea of what you’re doing each month because you’ve planned for it.”
Factor in your spending
While market volatility isn’t within your control, your spending is – and making your retirement savings last often comes down to your expenditures.
Start by identifying the essential expenses, and the extras. High fixed costs can quickly become a burden when markets slide, while essentials like housing, utilities and healthcare should be non-negotiable.
That doesn’t mean cutting out every enjoyment – retirement is meant for living. But many retirees build lifestyles that include vacation homes, recreational vehicles or frequent travel – all fine, as long as you have a cash buffer in place – ideally six to 12 months worth of expenses. If you can cover your expenses during a significant market drop without selling investment holdings at a loss, you’re in good shape to preserve your portfolio’s long-term growth potential.
Turn off the news
News headlines are designed to grab your attention. But constant exposure to financial analysis and stock tickers can fuel anxiety – even if your actual situation hasn’t changed much. Sometimes the best thing you can do is turn off the external news sources and focus inward. “It’s important to pause and ask yourself: Where is this fear coming from? Is it rooted in reality?” Conroy says.
Remind yourself that this isn’t the first time markets have been volatile – and it won’t be the last. You’ve likely lived through the stock market crash of 2008, the early days of the pandemic – maybe even the dot-com bust. Over time, the markets always recovered – and most long-term investors who stayed the course came out stronger.
Shift your money mentality
One of the biggest adjustments in retirement isn’t just financial – it’s about purpose and identity. “We are what we do,” Conroy says. “Our identities are our jobs.” So when the income stops, even if you’re financially prepared, it can trigger anxiety. “Figuring out what you do in retirement is sometimes an overwhelming thing,” Conroy adds.
Removing the impetus to ‘earn’ your keep is a vital part of creating a successful and fulfilling retirement – one that isn’t tied to how much money is coming in. “The uncertainty of not having a regular income – even just temporarily – can be unsettling,” Conroy says. “It’s a feeling many new retirees share, regardless of how strong their portfolios are.”
Making a successful psychological transition to retirement means stepping toward something meaningful to you – and redefining wealth. Yes, you still need a financial plan, but you also need a plan for your time, your sense of purpose and your legacy beyond the financial.
Stay in the market
However you navigate times of fluctuation, the biggest success strategy is to stay invested. Don’t attempt to time the market.
Short-term market fluctuations can be challenging but maintaining a long-term investment strategy is key to achieving financial goals. And the reality is, you’ll likely have 15 to 20 retirement years ahead of you – years when your invested assets will continue to grow, even as you draw them down. By staying invested and resisting the urge to time the market, you can withstand volatility and secure your retirement for years to come.
To learn more about how Genus can help align your portfolio with your long-term retirement goals, get started today with our values-based investment services.
Impact investments involve financial risk, and returns are not guaranteed. Investors should consider their financial goals, risk tolerance, and consult a financial professional before investing.
References:
Gratton, P. (2024, November 21). Stock market crash of 2008. Investopedia. https://www.investopedia.com/articles/economics/09/subprime-market-2008.asp
- Snow, J. (2025, March 6). The dot-com bubble burst 25 years ago. What does that history say about stocks today? Yahoo Finance. https://finance.yahoo.com/news/dot-com-bubble-burst-25-100000416.html?guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAFre5KUaIokvXIoXmJ_gaXGLnW3ZxqIOqzbUXFTeUwEuE6gmXvy0_R4E3df2fsbvP9UKtfdCq3uGfPSJnQranA3HkUnyLumiSd3q43NpDN-aJfrklQuSJZuUlmPbGUOhKcuuNhzYLhou1rP3sQLf24_eehXbzH-nVH9ypuTs3dIS&guccounter=2
- Timing the market is for suckers. It’s often a wealth killer for the average investor. (2024, December 24). Financialpost. https://financialpost.com/wealth/smart-money/timing-market-suckers-wealth-killer-average-investor
