If you’re planning to retire in the next few years, you may be watching today’s market with a mix of concern and confusion. Rising interest rates, inflation headlines, and geopolitical uncertainty can create anxiety—especially when your retirement nest egg is on the line. But take a deep breath: history, data, and expert insight all suggest that with the right approach, you can navigate this moment with clarity and confidence.
1. Volatility Is Normal—Even During Retirement Transitions
While it may feel like recent market swings are unusual, they’re not. According to J.P. Morgan Asset Management, the S&P 500 has had an average intra-year drop of 14% each year since 1980—but still managed positive returns in 34 of those 45 year【source: J.P. Morgan Guide to the Markets】.
What that means for you: If you’re approaching retirement, the key isn’t timing the market perfectly—it’s having a plan that can withstand ups and downs.
2. Emotions Can Steer You Off Course
Data from Morningstar shows that investors often underperform the very funds they invest in—largely due to emotional decision-making. Fear and panic can lead to poorly timed withdrawals or shifts to overly conservative assets, especially for those on the cusp of retirement【source: Morningstar Mind the Gap Study】.
The takeaway: Staying disciplined—and having a strategy that anticipates volatility—is more powerful than reacting to every headline.
3. Inflation Matters More Than You Think
Even modest inflation can erode your purchasing power over time. Charles Schwab reports that a $1 million portfolio with 3% annual inflation loses nearly one-third of its value in 15 years if not properly invested for growth【source: Schwab Center for Financial Research】.
So how do you protect yourself? By building a retirement income plan that balances growth, stability, and flexibility. This may include a mix of stocks, bonds, annuities, and other income-generating assets aligned to your personal goals and risk tolerance.
4. Practical Steps for Soon-to-Be Retirees
Here’s what we recommend:
- Review your time horizon. You may retire soon, but your portfolio needs to last decades. Planning for longevity is critical.
- Stress tests your plan. Run scenarios for market declines, inflation surges, and unexpected expenses.
- Revisit your withdrawal strategy. Understand how much you can safely draw each year without putting your future at risk.
- Assess your tax exposure. With multiple income streams (IRAs, 401(k)s, Social Security, taxable accounts), tax-smart planning can make a big difference.
You Don’t Have to Navigate This Alone
At Connect Wealth, we specialize in helping individuals and families prepare for and thrive in retirement. Our team brings a caring, expert approach to every conversation—grounded in decades of experience and a deep understanding of what matters most to you.
Let’s Build a Retirement Plan That Works—No Matter What the Market Is Doing. Schedule a free consultation with a Connect Wealth advisor today. We’re here to simplify the path forward, so you can enjoy the life you’ve worked so hard to build.