Don't Let Crazy Markets Derail Your Retirement Plan

Multiple red arrows pointing every which way on a light green background.

(Image credit: Getty Images)

published 11 July 2025

Stocks dropped and climbed back in rapid succession this spring as Wall Street reacted to evolving tariff policies, shaking up even the most seasoned investors.

The whiplash left many soon-to-be retirees and new retirees wondering, "Is now an OK time to retire?"

The reality is, if you're not sure you can afford to retire based on current stock market trends or economic conditions, you probably don't have a comprehensive plan in place. That fear is a warning sign that the success of your retirement is too closely tied to Wall Street.

From just $107.88 $24.99 for Kiplinger Personal Finance

Be a smarter, better informed investor.

CLICK FOR FREE ISSUE

https://cdn.mos.cms.futurecdn.net/hwgJ7osrMtUWhk5koeVme7.png

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.

The Kiplinger Building Wealth program handpicks financial advisers and business owners from around the world to share retirement, estate planning and tax strategies to preserve and grow your wealth. These experts, who never pay for inclusion on the site, include professional wealth managers, fiduciary financial planners, CPAs and lawyers. Most of them have certifications including CFP®, ChFC®, IAR, AIF®, CDFA® and more, and their stellar records can be checked through the SEC or FINRA.

If you have a comprehensive, proactive retirement plan, you can retire when and how you want.

Think beyond investments

Your tires are not your car. Your engine is not your car, nor are your doors. All of these parts by themselves are not a car; they need all the other pieces to become a car.

The same is true for your investment portfolio: Your investments are not a retirement plan; they're only part of your overall plan and strategy.

If opening and contributing to a 401(k) through your employer is the only retirement planning you've done, then retiring in a down market would be incredibly intimidating. When the market drops, so do your life savings.

Start planning, not guessing

If you're questioning whether you can afford to retire, you likely don't have enough clarity on how you will fund your retirement. Conversely, a comprehensive retirement plan allows you to say, "This is what I want, and this is how I will get there."

Rather than saving and hoping for the best, a retirement plan outlines clear goals and concrete strategies to both grow and protect your wealth.

True retirement planning requires a forward-thinking approach. We call this mentality "retire forward," and use strategies to create momentum for our clients as they work toward retirement, moving them closer to their goals one decision at a time.

Get retirement-ready

Once you have the right mindset, it's time to start planning your holistic retirement plan.

While there are dozens of decisions to think through and each plan should be as unique as the person it's built for, every retirement strategy should include four main steps:

1. Outline clear goals. When do you want to retire? What do you want to do in retirement? Perhaps you plan on moving, traveling, pursuing expensive hobbies or building a legacy to pass on to the next generation; all of these goals will heavily impact your plan.

I've known some clients who have retired successfully and happily with $400,000 in savings, and others who feel stretched thin with over $1 million. It all depends on your desired lifestyle.

2. Know where your income will come from. Once you know roughly how much retirement income you'll need, create a strategy for how you will reach that target and fund those future expenses.

Stock market investments are a part of income planning, but your plan should include sources of guaranteed income that are not solely tied to market performance, such as Social Security, real estate or pension annuities.

3. Protect against potential risks. Protection and growth are equally important in a good financial plan. Incorporate a year-round tax strategy into your financial plan, because it helps ensure more of your savings stays with you, not Uncle Sam.

A balance of tax-deferred and tax-free funds will help lower your tax liability in retirement.

Consider how much insurance you need to protect yourself from the "what-ifs" in life. Most people don't expect to need life insurance or long-term care insurance, but most retirees are incredibly thankful for the protection when their lives take a surprise turn.

Other potential risks, including inflation risk, sequence of returns risk and longevity risk, should also be addressed.

4. Test your plan. If you work with a financial adviser, they can run your plan through scenarios that test how your plan will react depending on certain factors and decisions.

For example, most planning software can show what will happen if the stock market crashes, you decide to retire early or want to claim Social Security later.

Looking for expert tips to grow and preserve your wealth? Sign up for Building Wealth, our free, twice-weekly newsletter.

This technology allows you to test how various strategies could affect you without putting your real money at risk.

If your adviser isn't showing you the real-life scenarios your plan might be put up against, I recommend finding someone who can put your plan to the test and prove their strategies will work through good times and bad.

No one wants to put their goals on pause, but if your retirement plan relies too heavily on stock market performance, you may have to. A well-diversified investment portfolio is an important part of any retirement plan, but it cannot help you retire on its own.

Instead, proactive planning can provide the kind of freedom you need to retire when and how you want by strategically considering every area of your financial life and bringing those pieces into alignment with your goals.

If current economic conditions are holding you back from retirement, now is the time to ask yourself, "Do I have a plan, or just investments?"

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.

TOPICS

As the founder and CEO of Momentum Wealth, Nico Pesci is passionate about creating efficient retirement plans and helping clients adapt to volatile economic environments. After watching his parents struggle to keep their retirement savings during the 2008 financial crisis, Nico founded Momentum Wealth to help people like his parents build the confidence they need to enjoy the retirement they deserve.