Stock Market Losses or Lower Returns: Which Is More Dangerous to Your Retirement?
One eye-opening, simple math equation can clearly show retirement savers the answer to that question, and if you are among those investors who take pride in their high-performing portfolios, you may be surprised.


Do you want to make your savings last throughout retirement? If you do (and of course you do), I believe that once you are within five years of retirement, you need to invest more conservatively than you did while you were growing your savings. But in most cases, a more conservative approach translates into lower returns. Is it a worthwhile trade-off?
I believe so, and I’d like to illustrate my point with a question: If you lost 50% of your money in a bear market, how much would you need to make to get back to even? Did you say 50%? If so, you’re in good company: When I ask this question during seminars, that’s usually the answer I receive. It’s also a wrong answer. Let’s do the math:
How a 50% Gain Can Result in a $250,000 Loss
If you had $1 million saved for retirement and lost 50%, you would have $500,000. Ouch. If you made 50% on that $500,000, you’d make $250,000, which would bring your total up to $750,000, not $1 million. You’d need to make 100% to get back to even.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
And if you did need to make 100% to get back to even, how long would that take you? At 2% per year, it would take you 35 years to recover. If you made 6% per year, you would need 12 years to get back to even. Even if you made 10% per year, it would still take you seven years to recover your money. And what are the odds you’d make 10% every year for the next seven years? Sounds like a pretty high expectation to me.
How Realistic Is a 50% Loss?
That's the cost of losing money, and that’s why I believe losing money is more dangerous to your retirement than lower returns. Yes, losing 50% of your money may be an extreme example, but people have lost that much, and in recent memory. The S&P went down almost 50% in the Y2K bear market, and dropped 57% in 2008.
One more factor to consider: I don’t believe many retirees can afford the time cost involved with waiting. If you were retired and living on your investments, would you be able to drastically cut your cost of living while you were waiting for your money to come back to even?
What People Near Retirement Should Do
In my opinion, the best way to make your savings last is to employ a conservative investment approach once you’re within five years of retirement. That approach should include:
- Taking only as much risk as is necessary to accomplish your financial goals.
- Employing a strategy that can protect your investments during bear markets.
Yes, those tactics may result in lower returns. But as I think I’ve shown, the cost of lower returns can be worth the cost of protecting your retirement.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Ken Moraif is the CEO and founder of Retirement Planners of America (RPOA), a Dallas-based wealth management and investment firm with over $3.58 billion in assets under management and serving 6,635 households in 48 states (as of Dec. 31, 2023).
-
AI vs the Stock Market: How Did Alphabet, Nike and Industrial Stocks Perform in June?
AI is a new tool to help investors analyze data, but can it beat the stock market? Here's how a chatbot's stock picks fared in June.
-
Stock Market Today: A Historic Quarter Closes on High Notes
"All's well that ends well" is one way to describe the second quarter of 2025, at least from a pure price-action perspective.
-
Eight Tips From a Financial Caddie: How to Keep Your Retirement on the Fairway
Think of your financial adviser as a golf caddie — giving you the advice you need to nail the retirement course, avoiding financial bunkers and bogeys.
-
Just Sold Your Business? Avoid These Five Hasty Moves
If you've exited your business, financial advice is likely to be flooding in from all quarters. But wait until the dust settles before making any big moves.
-
You Were Planning to Retire This Year: Should You Go Ahead?
If the economic climate is making you doubt whether you should retire this year, these three questions will help you make up your mind.
-
Are You Owed Money Thanks to the SSFA? You Might Need to Do Something to Get It
The Social Security Fairness Act removed restrictions on benefits for people with government pensions. If you're one of them, don't leave money on the table. Here's how you can be proactive in claiming what you're due.
-
From Wills to Wishes: An Expert Guide to Your Estate Planning Playbook
Consider supplementing your traditional legal documents with this essential road map to guide your loved ones through the emotional and logistical details that will follow your loss.
-
Your Home + Your IRA = Your Long-Term Care Solution
If you're worried that long-term care costs will drain your retirement savings, consider a personalized retirement plan that could solve your problem.
-
I'm a Financial Planner: Retirees Should Never Do These Four Things in a Recession
Recessions are scary business, especially for retirees. They can scare even the most prepared folks into making bad moves — like these.
-
A Retirement Planner's Advice for Taking the Guesswork Out of Income Planning
Once you've saved for retirement, you'll need your nest egg to support you for as many as 30 years. For that, you need a clear income strategy, not guesswork.