Answers to Every Early Retiree's Questions This Year

During a meeting, adults raise their hands to ask questions.

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published 10 September 2025

When people enter early retirement, they frequently have unspoken concerns — both financial and otherwise.

This year is a bit unusual. We have record-high stock market values, so many new retirees see strong promise for their investment portfolios to generate income throughout their retirement years.

However, many people are concerned those high values won't last.

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So, people are a bit more wary right now than usual. They have questions … which they sometimes don't ask because they are nervous.

Asked and answered

Here are several, along with the perspectives I've offered in 2025.

Is it really a good time to retire with all this market volatility and economic uncertainty? Should I just push through and hope it all works out?

Market volatility is common. However, when you retire, volatility can become more emotionally challenging — especially since you're no longer adding to your 401(k) with each paycheck.

We typically see stock market corrections, or short-term declines of about 10%, every year or two — and bear markets, meaning declines of 20%, every 3½ years, on average.

When a pullback happens, it's a great time to gauge your true risk tolerance, and sometimes there are adjustments to be made to your financial plan.

Remember that the market affects only part of your financial story. Many people have other steady sources of income, such as pensions. In this case, retirement income is much less affected by market swings.

What if stocks tumble just after I retire?

In the financial planning process, an adviser typically will show various scenarios for how your portfolio value may change over time. This process is key to determining both investment allocation and withdrawals.

Your adviser can therefore show you that, yes, it's true that a down market shortly after retiring can have a materially negative impact on your financial plan.

Therefore, prior to retirement, we like to model a bear market scenario in the first year of retirement and see how that affects someone's specific situation.

That information does sometimes suggest to people that they may want to consider working one more year.

More often, though, it provides reassurance that everything is likely to be just fine — and the focus should be more about your readiness and what you want from your time than about catching the exact right day.

Should I tweak down my withdrawals if the market's really flat or down?

I don't recommend that retirees change their spending plans if the market is flat for a year. Many people like to think about retirement income in terms of a withdrawal rate.

In my experience, people who withdraw less than or equal to 4% of an investment portfolio each year tend to see their nest egg increase throughout retirement.

That doesn't mean there's a magical "4% rule" that guarantees success, but it's a good way to gain perspective in flat or down markets.

What if my partner or I suffer a major health setback early in retirement?

Nothing is a bigger priority than health. Make sure that is your main focus — more than money. But sometimes in the financial planning process, you have to be realistic about longevity estimations if health problems are severe.

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In that case, we typically still model with an assumption that at least one spouse will live to age 90 or 95. In the event one spouse passes sooner, household spending tends to be lower thereafter.

What happens if my spouse and I end up with "too much togetherness" time?

This is a common concern — and simply knowing it's common usually helps.

Retirement is a gift of time. That time needs managing in new ways.

What I find common is each spouse in retirement takes their hobbies to a new level to, say, "get away" from each other. The husband golfs three to four times a week or joins an additional league. The wife expands the garden and creates her own arts and crafts room in the extra bedroom.

You find out quickly what a retired client likes to do from the other spouse's comments: "He spends all his time on the car, I tell ya!" This is especially true when I ask what they spend their money on or what they would like to spend more money on.

The longer travel trips might also have something to do with this concern, too. You are used to spending five to seven days in a hotel in Arizona, which now turns into a month in an Airbnb … or a three-week cruise around Alaska.

What if my kids or extended family start asking for more financial or caregiving support, now that I'm retired and "have time"?

Time is certainly a precious gift that grandparents can give to parents. Taking care of a toddler for one day a week can have major financial impacts with daycare costs being north of $1,200 to 1,500 per month.

Perhaps there's a mutual blessing — or perhaps not. But this is one area where thinking "family" as much as "dollars" may be a blessing for everyone over time.

Should I feel guilty about spending now on things like travel and fun, instead of leaving more for my kids?

I would not feel guilty — and your kids probably wouldn't want you to either. They have seen how hard you both worked to raise the family and get to a place of retirement.

That said, this can sometimes be polarizing. I have seen folks want to pass away with only one dollar to their name, and they are very transparent with the family about it.

I have also seen folks still penny pinch because of old habits, even when they don't need to.

What's most important is doing a good job of educating kids on the wealth that may or will come to them.

You may find, too, that it's much more rewarding to give meaningful gifts during your own lifetime, whether via a 529 plan for education, a down payment on a house or other practical needs.

A $30,000 gift now could have a $200,000 impact later by allowing your children to keep more money invested longer term.

How much cash do I really need to keep?

I recommend holding cash assets that — when combined with funds you know will flow in from other certain sources of income, like Social Security or pensions — represent two full years of spending.

For example, say a couple's plan is for spending $80,000 annually. Without taking into account other sources of income, two years of spending would be $160,000.

However, this couple draws $30,000 of Social Security and $20,000 of pension income annually. Over two years, those sources of income will generate $100,000. That implies the couple should have $60,000 in cash or cash-equivalent investments.

Closing thought

Thorough planning around your concerns is one of the best ways to ensure you can sleep at night.

Ask questions and share concerns. It's our responsibility as advisers to make sure these are addressed so if there are bumps in the road, you are prepared and confident.

This information is for educational and illustrative purposes only and should not be used or construed as financial advice, an offer to sell, a solicitation, an offer to buy or a recommendation for any security. Opinions expressed herein are as of the date of this report and do not necessarily represent the views of Johnson Financial Group and/or its affiliates. Johnson Financial Group and/or its affiliates may issue reports or have opinions that are inconsistent with this report. Johnson Financial Group and/or its affiliates do not warrant the accuracy or completeness of information contained herein. Such information is subject to change without notice and is not intended to influence your investment decisions. Johnson Financial Group and/or its affiliates do not provide legal or tax advice to clients. You should review your particular circumstances with your independent legal and tax advisors. Whether any planned tax result is realized by you depends on the specific facts of your own situation at the time your taxes are prepared. Past performance is no guarantee of future results. All performance data, while deemed obtained from reliable sources, are not guaranteed for accuracy. Not for use as a primary basis of investment decisions. Not to be construed to meet the needs of any particular investor. Asset allocation and diversification do not assure or guarantee better performance and cannot eliminate the risk of investment losses. Certain investments, like real estate, equity investments and fixed income securities, carry a certain degree of risk and may not be suitable for all investors. An investor could lose all or a substantial amount of his or her investment.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Greg King, CFP®, is a Senior Vice President and Wealth Advisor at Johnson Financial Group, where he is responsible for growing quality client relationships by providing sound financial guidance to high-net-worth individuals and families. Greg takes a detailed approach to financial planning that centers around clients' goals and values. With professionalism and positive energy, Greg always strives to go above and beyond for his clients to ensure their satisfaction.