How do you prepare for a bear market during retirement?

Market downturns are a part of every economic cycle—but that doesn’t make them any less stressful, especially if you’re retired or about to retire. Unlike someone in their 30s or 40s, retirees don’t always have the luxury of time or income from a job to ride out a bear market. That’s why having a solid bear market retirement strategy is crucial.

Here’s how you can prepare for a bear market during retirement—and how working with a retirement planner can help you stay protected.

What is a bear market, and why should retirees care?

A bear market is when the stock market drops 20% or more from recent highs. While market corrections are normal, bear markets can last longer and cause more financial damage—especially if you’re withdrawing money from your retirement accounts.

For retirees, the biggest risks during a bear market include:

• Sequence of returns risk – Withdrawing during a market decline can permanently reduce your retirement nest egg.
  
• Increased stress – Watching your portfolio shrink can lead to emotional decisions and panic selling.
  
• Longevity risk – Running out of money faster than planned due to poor returns.
  

This is why bear market retirement planning should be part of your overall retirement strategy.

Diversify your portfolio with risk in mind

One of the most effective ways to manage risk in retirement is by ensuring your investments are properly diversified.

A few smart moves:

• Reduce exposure to high-volatility stocks
  
• Increase allocations to more stable income-producing assets (like bonds or annuities)
  
• Keep part of your portfolio in cash or short-term investments for liquidity
  
• Consider alternative investments that aren’t closely tied to the stock market
  

This is where a financial advisor for retirees can guide you. We help clients build portfolios that balance growth, income, and protection—especially in uncertain times.

Have a “cool cash” buffer

Retirees should aim to keep 12–24 months of living expenses in cash or very conservative investments. This buffer gives you peace of mind during market downturns and lets you avoid selling investments at a loss.

Having a cash cushion helps you:

• Pay bills and cover daily living costs
  
• Ride out the market decline without touching long-term investments
  
• Feel more secure when the market gets shaky
  

Want help setting up the right buffer? Schedule a free consultation with our team to create a personalized bear market plan.

Use a dynamic withdrawal strategy

In a bear market, one of the smartest things you can do is adjust how much you withdraw from your retirement accounts.

Rather than using a fixed percentage each year, a flexible withdrawal strategy helps your money last longer. This might look like:

• Lowering withdrawals during market downturns
  
• Basing withdrawals on performance from the previous year
  
• Prioritizing income from dividends or interest instead of selling shares
  

A retirement planner can show you how to safely adjust your withdrawals without compromising your lifestyle.

Lock in guaranteed income streams

If you’re worried about outliving your money or losing income during a bear market, guaranteed income sources can provide added protection.

Options include:

• Social Security (optimize your claiming strategy!)
  
• Pensions
  
• Annuities with guaranteed income features
  

Having even a portion of your retirement income guaranteed can reduce stress when the market dips. Not sure what your options are? Let’s talk—we’ll walk you through it.

Don’t panic—have a plan

Emotion is the enemy of smart investing. It’s tempting to sell when the market’s falling, but panic-selling can lock in losses and hurt your long-term strategy.

Instead:

• Stick to your plan
  
• Stay diversified
  
• Rely on your income buffer
  
• Review your risk level and rebalance as needed
  

Meet with us regularly so we can help you stay focused on the long game and avoid costly mistakes. Our clients have the confidence to stay the course—even when things get tough.

Reassess your goals and timeline

Bear markets are a good opportunity to check in on your financial goals. Are you still on track? Do you need to make adjustments to your spending, travel, or gifting?

Use this time to:

• Review your annual spending plan
  
• Adjust expectations for returns
  
• Look at your estate planning and tax strategies
  

And remember, you don’t have to figure this out alone. Working with a retirement planner can help you stay nimble and confident—no matter what the market is doing.

Why working with a financial advisor matters (especially now)

Bear markets test retirement plans. And if you’re handling it all on your own, it can feel overwhelming. But with professional help, you gain more than a second opinion—you get a partner with experience guiding people through every type of market.

We help retirees like you:

• Build portfolios designed to weather downturns
  
• Plan flexible income strategies
  
• Minimize taxes and maximize Social Security
  
• Adjust to changing conditions with confidence
  

Schedule a complimentary consultation and find out how we can support you through whatever the market brings.

Final thoughts: Be proactive, not reactive

No one can predict the next bear market—but you can absolutely prepare for it.

With the right bear market retirement strategy, you can:

• Protect your income
  
• Preserve your investments
  
• Maintain your lifestyle
  
• And most importantly—sleep well at night
  

If you’re not sure whether your retirement plan is built to withstand a downturn, now is the time to check in. Schedule a free strategy session with a Wealth Advisor.