Investing Portfolio Peace of Mind, Now and in Retirement
The stock market soars, and then it takes a nosedive. When it does, remember: Disciplined investors will do best.


Retirement savers should know how their investments are doing, but they should try not to become too obsessed with the ups and downs of the market.
The market will always fluctuate — that's how the financial world works. Political unrest, turbulent foreign affairs, election results or even a viral social media post can cause shifts in investment value. Facing these moments, I always tell my clients to stay the course, especially if they have many working years left to look forward to.
Temper Volatility with Diversification
But my clients nearing retirement have different issues to consider. Sudden drops in the market can have long-term negative consequences when withdrawing money from a portfolio. Diversification is the key. While I recommend all of my clients diversify their portfolios, it’s especially crucial for those nearing retirement.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free 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.
Diversified, conservative investments give you financial flexibility. As funds are needed to meet living expenses, you can withdraw them from investments in your portfolio that are stable or growing. In other words, if you have a mix of financial buckets to draw from, you won't deplete the value of your investments in a loss situation.
For example, a retiree who withdraws $5,000 a year from a $500,000 portfolio of mainly growth stocks will find when the market is flat, their stocks only represent 1% of their portfolio’s value because they’re selling a minuscule number of shares. In a steep downturn, that $5,000 withdrawal might encompass more than 1% of the portfolio’s value. Furthermore, when the market recovers, the investor would find they have fewer shares gaining value, resulting in a permanent loss of assets.
A well-balanced retirement portfolio should consist of stocks, bonds, annuities and, in some cases, life insurance. Crafting a portfolio with the right combination of investment vehicles depends on what your short-term and long-term goals are, your risk tolerance, and how we think your investments might evolve over time. For instance, someone nearing retirement might focus more on limiting the risk to their wealth principal by allocating more of their assets to a mix of interest-bearing accounts, such as money market funds, bonds and cash, rather than stocks, which are typically riskier.
Final Considerations: Inflation and Cash
While principal protection is paramount, growing net worth can help the retiree keep up with inflation. When your salary is no longer negotiable, investment growth is how you can fend off the loss of real income due to inflation. It all starts with analyzing your spending patterns and trimming back any superfluous costs, thereby creating an accurate projection of where you're most at risk of outliving your retirement funds.
Depending on your situation, we could advise income-generating investments, for instance, owning a rental property or starting a side hustle to help replenish your retirement savings. For others, downsizing to a smaller property or revising the payment schedule for future major expenses might be more practical.
Retirees should also maintain a substantial cash reserve. Having non-volatile funds on hand will enable you to deal with temporary financial needs, such as an illness, major appliance failures or damage to your home, without exhausting your portfolio. In general, the more cash you have on hand, the better, but try to aim for at least one to two years’ worth of living expenses. Make sure your funds are easy to access in an interest-yielding savings account or money market account to help you maintain the stability you need.
The Bottom Line: Stay Calm and Focused
Finally, every investor — retiree or young earner — should remain calm and stay the course. The markets will shift. There will be good years and not-so-good years. But through it all, your investment professional should be with you, reminding you the best way to weather a storm is to remember that all storms eventually pass.
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.

In 2010, Janie joined a retirement financial firm and in 2015 bought the firm and renamed it Kelly Capital Partners. As a financial adviser, Janie serves clients through detailed financial planning, disciplined investments, insurance strategies and proactive personal service. Her focus is to help retirees attain confidence in their financial future through a well-designed plan they can rely on throughout their retirement years. Janie achieved the Retirement Income Certified Professional designation, Series 65 registration and holds a Michigan life and health insurance license. She is the author of Rerouting to Retirement and has authored whitepapers and articles in financial periodicals.
-
Seven Surprising Reasons Retirees Are Going Back to Work
Sure, money is a big reason to come out of retirement, but it's not the only reason retirees are doing it.
-
Dow Gains 617 Points as Rate Cuts Near: Stock Market Today
Wednesday's economic data didn't shift Wall Street's expectations that the Fed is preparing for a rate cut at next week's meeting.
-
Four Clever and Tax-Efficient Ways to Ditch Concentrated Stock Holdings, From a Financial Planner
Holding too much of one company's stock can put your financial future at risk. Here are four ways you can strategically unwind such positions without triggering a massive tax bill.
-
Beyond Banking: How Credit Unions Serve Their Communities
Credit unions differentiate themselves from traditional banks by operating as member-owned financial cooperatives focused on community support and service rather than shareholder profit.
-
Answers to Every Early Retiree's Questions This Year, From a Wealth Adviser
From how to retire in a crazy market to how much to withdraw and how to spend without feeling guilty, a financial pro shares the advice he's given this year.
-
The Risks of Forced DST-to-UPREIT Conversions, From a Real Estate Expert
Some new Delaware statutory trust offerings are forcing investors into 721 UPREIT conversions at the end of the hold period, raising concerns about loss of control, limited liquidity, opaque valuations and unexpected tax liabilities.
-
I'm a Financial Adviser: You've Built Your Wealth, Now Make Sure Your Family Keeps It
The Great Wealth Transfer is well underway, yet too many families aren't ready. Here's how to bridge the generation gap that could threaten your legacy.
-
Want to Advance on the Job? Showing Some Courtesy and Appreciation Could Help
Two business professors share their insights about the impact of digital communication on the social skills of some in Gen Z and the importance of good manners on the job.
-
From Job Loss to Free Agent: A Financial Professional's Transition Playbook (and Pep Talk)
The American workforce is in transition, and if you're among those affected, take heart. You have the skills, experience and smarts that companies need.
-
A Financial Planner's Top Five Items to Prioritize When Your Spouse Is Ill
During tough times, it's easy to overlook important financial details, but you'll be so much better off if you take care of these things right now.