Keeping a Level Head in Volatile Markets During Retirement

Retirement is a time to enjoy the fruits of decades of work, but market volatility can challenge even the most confident investors. Navigating turbulent times requires more than just financial knowledge—it demands a calm, strategic mindset anchored in a well-thought-out plan.

Many people associate “the stock market” with unpredictability and fear. This emotional response often leads to rash decisions, especially when the media amplifies every downturn. But history shows us that markets rise and fall—and recover. Understanding that volatility is normal is the first step in maintaining perspective.

Successful retirement planning

A cornerstone of successful retirement planning is having a detailed cashflow plan. It’s not enough to guess your expenses—know them and understand how inflation uniquely affects your lifestyle. This clarity allows you to assess your real return needs, which are the returns after inflation, not just raw percentages.

Unfortunately, the financial industry is full of jargon. Reframing technical terms into everyday language helps retirees engage more confidently with their financial strategy. For example, understanding the difference between “risk” and “volatility” is crucial. Volatility is short-term movement; risk is the possibility of not meeting your long-term goals.

Risk Fuels Growth

Risk is necessary because it fuels growth. If your time horizon is long—say 30 to 40 years in retirement—you need investments that outpace inflation. That’s where global equities come in. Over every long-term historical period, they’ve delivered positive returns and remain the only asset class to consistently beat inflation.

But emotional reactions often derail even the best plans. That’s why it’s vital to anticipate the psychological cycles of investing—fear, denial, panic, and eventually, recovery. Managing emotions is just as important as managing money.

Bucketing Approach

One practical way to build resilience into your strategy is by using a bucketing approach. This involves dividing your retirement assets into short-, medium-, and long-term “buckets” to match your expected cash needs. Keep two to four years of income in cash to protect against “sequence risk”—the danger of withdrawing during a market downturn early in retirement.

Finally, a reminder: markets don’t care who the U.S. president is. They respond to long-term drivers like innovation and consumer demand. With a structured plan and the right mindset, retirees can confidently navigate volatility and enjoy the retirement they’ve worked hard for.

Dirk Groeneveld, Certified Financial Planner.