What to do when you are retiring soon and the markets just crashed

By Maria Smit *.Retiring into a market crash can feel like hitting turbulence just as your plane takes off. After years of disciplined saving and careful planning, watching your portfolio drop in value at the final stretch is deeply unsettling. You're not alone in your concern. According to the 2025 Allianz Life Retirement Study, 64% of Americans now say they fear running out of money in retirement more than death itself. This fear is compounded by rising inflation, tax uncertainty, and anxiety over the long-term reliability of Social Security.But here's the most important truth: a market crash at retirement is not the end of your retirement plan. It just means that the next steps matter more than ever..Stay calm and don’t cash outThe worst thing you can do now is panic and sell. Locking in losses during a downturn can irreversibly damage your long-term wealth. History shows that markets recover often swiftly and missing just a few of the best recovery days can significantly reduce your portfolio’s future value. Staying invested, with the right strategy, is still your best path forward. .Understand your time horizon: It is likely 30 years, not 3One of the biggest misconceptions at retirement is thinking you need to get “out of the market” and into cash. But even though you’re retiring now, you may need this money to last 25–30 years. That means you cannot afford to abandon long-term growth assets entirely.Putting everything into money market funds might feel safe, but it exposes you to a different risk: longevity risk the risk of outliving your savings. In a low-interest-rate environment, returns from cash and money markets often fail to beat inflation over time, eroding your purchasing power just when you need it most..Build a buffer, but keep growingWhat you can do is build a short-term buffer:Set aside 1–3 years of income in conservative income funds or money market accounts.Keep the rest invested in a diversified portfolio with enough growth exposure to fight inflation and support long-term income.This “bucket strategy” allows you to cover your immediate needs without having to sell depressed investments. It also gives your growth assets time to recover something history shows they tend to do, especially after sharp downturns..Review your withdrawal strategyIf you’re already drawing income from a living annuity or investment portfolio, now is the time to revisit your drawdown rate. Can you temporarily reduce your withdrawals? Can certain expenses be delayed? These small adjustments can significantly increase the sustainability of your plan.Delaying withdrawals from equities and instead drawing from more stable sources like income funds, can help preserve your portfolio’s long-term health..Don't forget diversification and lifetime incomeIn times of uncertainty, income-focused investments and guaranteed income products become more valuable. Diversified portfolios that include income funds, dividend-paying stocks, or fixed index annuities can provide needed stability without giving up on returns altogether..Most importantly: Get professional adviceA financial planner can:Stress-test your portfolio against future volatilityRecommend changes to ensure income sustainabilityIdentify hidden risks like tax drag or estate inefficienciesHelp you stay disciplined and invested with confidence.A crash is a moment and retirement is a journeyIt’s natural to feel unnerved when the markets fall. But retirement is not a single moment it’s a multi-decade journey. The decisions you make in the first 1–2 years set the tone for how well your plan holds up over the next 20–30.Stay the course. Rebalance when the time is right. Protect your cash flow but keep your long-term money working for you. With the right advice and perspective, you can retire with confidence, even in a bear market.* Maria Smit, CFP®, is an advisor at Brenthurst Wealth Pretoria maria@brenthurstwealth.co.za.

What to do when you are retiring soon and the markets just crashed

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