You're Close to Retirement and Cashed Out: How Do You Get Back In?
If you've been scared into an all-cash position, it's wise to consider reinvesting your money in the markets. Here's how a financial planner recommends you can get back in the saddle.


First, I must say: I get it. The markets have been very volatile, and for anyone who is close to actually needing the money, that can make you sick to your stomach.
There probably isn’t a chart or data point I can point to that will eliminate your nausea.
Tariffs are the worst thing since Lunchables. Recently, the dollar, U.S. bonds and U.S. stocks were all falling at the same time. This time really is different, right?

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.
The tricky thing about volatility and bear markets is that they all feel different. In 2022, stocks and bonds both went down as we dealt with high inflation.
In 2020, we were stuck in our homes because of a global pandemic.
In 2008, there were legitimate questions about whether our financial system would collapse.
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.
In all cases, corporations found ways to make money (or they ceased to exist), and your 401(k) found its way to new highs.
Unless you’re überwealthy or überfrugal, cash probably won’t do the trick in retirement. The best market days often follow the worst, and missing those best days will kill your long-term returns.
Here are some ideas to get back in.
1. Pick a re-entry point
Mathematically, this can be simple. Emotionally, maybe less so. An example of this would be picking a loss target.
For example, when the S&P 500 drops 25%, I put my money back in. This will require you to watch the market every day.
Equally important, you will have to be willing to pull the trigger.
2. Get back in in stages
Let’s say you moved $2 million into cash. First, make sure that cash is earning something.
There are now several cash-like vehicles paying around 4%. That’s $80,000 per year in missed interest if the money is sitting in a 0% checking account at your big bank.
From there, pick a period over which you are going to reinvest your money. The more cautious you are, the longer this should be. We typically reinvest over three, six or nine months. Nine is reserved for the most negative Nancys.
Nine months: You are investing $222,222 per month back into whatever investments you previously had. You are hoping there are more down days in front of us and that by spreading out your purchases, you will be able to buy on sale.
Six months: $333,333 per month back into your investments.
Three months: $666,666 per month back into your investments.
3. Go back into something more conservative
Risk tolerance is what you’re comfortable losing. Risk capacity is what you can afford to lose.
As you get closer to retirement, typically, both go down. With the secular bull market we’ve experienced since 2009, you probably have more in stock (pre-sale) than you ever have had before. It’s likely that you sold because you were in an allocation beyond your risk tolerance, risk capacity or both.
If you want to try the risk tolerance tool we use, you can access it online. If it comes back saying you’re a “moderate” investor, but you were 90% in stock, it probably makes sense to reevaluate.
Perhaps you’d be more comfortable getting back into the market if you knew that only 60% of your portfolio was exposed to the bigger swings.
4. Name your dollars
When my oldest daughter started doing work around the house for money, she kept the cash in an envelope labeled “baby doll.” That money obviously could not be invested; it needed to be used for a baby doll!
If you’re not buying a baby doll, here’s what I would suggest: Keep six months of expenses in cash. Label that account “rainy day.”
Add up anything you know you will need to buy in the next 24 months. Keep that in a separate cash equivalent account. Name that “2025-2026.”
Consider investing the money that you won’t touch until at least 2027. The bet then becomes that the market will recover no later than 2027. No crystal ball here, just a safer bet than saying it will recover this month or next.
Looking for expert tips to grow and preserve your wealth? Sign up for Building Wealth, our free, twice-weekly newsletter.
Whenever we have volatile periods like the one we are experiencing now, I go through our financial plans just to make sure everyone is still reasonably safe.
What I know from tinkering is that very few clients would still be comfortable if I moved their investment allocation to all cash in the plan. There is some rate of return they need to maintain their lifestyle in retirement.
If you want to make sure you’re still in a sound position, you can access a free version of the software we use online.
Related Content
- Before the Next Time Markets Sink, Do Your Lifeboat Drills
- The Retirement Mindset Shift: Deciding When to Ease Off Risk
- Are 60/40 Portfolios Still Relevant Today?
- Asset Allocation for Retirees: Five Things to Consider
- Six Financial Actions to Take the Year Before Retirement
Get Kiplinger Today newsletter — free
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.

After graduating from the University of Delaware and Georgetown University, I pursued a career in financial planning. At age 26, I earned my CERTIFIED FINANCIAL PLANNER™ certification. I also hold the IRS Enrolled Agent license, which allows for a unique approach to planning that can be beneficial to retirees and those selling their businesses, who are eager to minimize lifetime taxes and maximize income.
-
Retire in Malaysia for Affordable Luxury
Many expats retire in Malaysia, a Southeast Asian country with a world-class city. Come for the affordable living, stay for the top-notch healthcare and cuisine.
-
How Our Favorite ETFs Are Performing Amid Market Volatility
A roller-coaster year for the stock market has weighed on several of our favorite ETFs, but one equities fund is faring better than others. Here's why.
-
Retire in Malaysia for Affordable Luxury
Many expats retire in Malaysia, a Southeast Asian country with a world-class city. Come for the affordable living, stay for the top-notch healthcare and cuisine.
-
How Our Favorite ETFs Are Performing Amid Market Volatility
A roller-coaster year for the stock market has weighed on several of our favorite ETFs, but one equities fund is faring better than others. Here's why.
-
I'm a Financial Professional: This Is the Roth Conversion Mistake Too Many People Make
Converting your traditional IRA to a Roth can be a fantastic tax-saving move, but you've got to be smart about two things: how much and when.
-
The Overlooked Generation: An Expert's Guide to How Gen X Can Finally Get Ahead
A perfect financial storm has been lashing this generation for years, but they still have time to get their retirement back on track with a few key moves.
-
Financial Advice and Retirement Confidence: What's Wealth Got to Do With It?
This retirement researcher notes that retirement confidence increases the most for those with access to advice who have a lower total level of savings.
-
The ‘First Year of Retirement’ Rule
The 'first year of retirement' rule says the 12 months after you leave work set the tone for your entire later life — so it's vital to approach them mindfully.
-
Tech Stocks Drag This Growth Fund Down
A rough stretch for mega-cap tech and tech-adjacent names has put pressure on this Mairs & Powers mutual fund.
-
Timing Is Everything for Roth Conversions: An Expert's Guide to the Right Strategy
Understanding the nuances of Roth conversions can help you avoid forking over more money in taxes than you need to.