This Four-Part Retirement Strategy Can Help Withstand Bad Timing
If you’re worried about the markets being down when it’s time for retirement, consider dividing your assets among different baskets to boost your confidence.


Diversification used to be simple enough. A typical portfolio included stocks, bonds, and cash.
But that kind of traditional diversification has proven less effective in recent years as market volatility has increased. Discovering if your portfolio is designed to prosper during good market environments and withstand poor ones is essential.
We spend our lives saving and accumulating for retirement. Many people do a good job of diversifying and likely have seen their investments grow. But as we approach retirement, our priorities begin to shift. Sure, we still want to grow our money — and stay ahead of inflation. But now protecting what we’ve accumulated — and generating income from it — become the top priorities.

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.
Mitigating risk, maximizing time
A major risk retirees face is having a big market pullback at the same time they are withdrawing their “retirement paycheck.” When that happens, not only does the account value decrease because of poor performance, but it’s further reduced because of the withdrawal. With that withdrawn money gone forever, when the remaining account balance potentially rebounds, the gains will be muted.
Unfortunately, the Swiss Army knife of an investment designed to grow money, protect it from downturns and generate consistent income — all at the same time — doesn’t exist. Instead, to help navigate this delicate landscape, dividing assets among several baskets — and assigning each one a specific time frame and corresponding risk profile is prudent.
Compartmentalization is key. Layered on top of your fixed income streams — like Social Security, pensions and annuities — you can fill baskets designed for income today, conservative investments for the nearer term and more balanced or growth approaches for the longer term. Today’s basket spins off income needed now — allowing the future baskets the time to potentially grow so they are ready when needed.
Here’s a framework of a four-segment strategy to help mitigate poor market timing risk:
- Lifetime income. Sources such as Social Security, pensions and annuities form an “income floor.”
- Fixed income. Positioned atop your “income floor,” this segment is meticulously crafted to gradually deplete over a span of three to five years. Its investments typically lean towards the secure side, often including guaranteed options.
- Balanced. Functioning as a bridge connecting the income and growth components, the balanced segment is typically afforded a time horizon of five to 10 years. Operating as a dual-force engine, profits generated from this category may supplement the income needs originating from the fixed-income segment.
- Long-term growth. Engineered for a growth trajectory spanning more than 10 years, money allocated to this basket aims to benefit from remaining invested through multiple market cycles. This category can also encompass unconventional investment types.
Lacking a well-defined strategy for generating monthly retirement income (unnecessarily) introduces a large element of uncertainty and anxiety. However, implementing a time-segmented retirement income plan installs an overarching strategy to guide the selection of suitable investments aligning with a multiyear, inflation-adjusted income need. By embracing a strategy-oriented approach, individuals can navigate their retirement journey with enhanced confidence.
Dan Dunkin contributed to this article.
The appearances in Kiplinger were obtained through a public relations program. The columnist received assistance from a public relations firm in preparing this piece for submission to Kiplinger.com. Kiplinger was not compensated in any way.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Bleakley Financial Group, a registered investment advisor. Amwell Ridge Wealth Management conducts advisory business under a “doing business as” (d/b/a) name; however, Bleakley Financial does not hold itself as conducting advisory business through Amwell Ridge Wealth Management. Bleakley Financial Group and Amwell Ridge Wealth Management are separate entities from LPL Financial.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision. Investing includes risks, including fluctuating prices and loss of principal.
No strategy assures success or protects against loss. Past performance is no guarantee of future results. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. Asset allocation does not ensure a profit or protect against a loss.
Guarantees are based on the claims paying ability of the issuing company. LPL Financial, Amwell Ridge Wealth Management, Bleakley Financial Group, and Kiplinger are not affiliated.
Related Content
- Nervously Nearing Retirement? Four Do’s, Four Don’ts and One Never
- Five Common Retirement Mistakes and How to Avoid Them
- Don’t Let Bad Luck Ruin Your Retirement Dreams
- Four Tips to Help You Conquer the Retirement Mountain
- Glass-Half-Empty Retirement Outlook? Here’s Some Advice
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.

David Johnston is the managing partner of Amwell Ridge Wealth Management and a CERTIFIED FINANCIAL PLANNER™ professional. He built the firm around the fundamental belief that a proper financial plan begins with risk management, then infuses innovative, enhanced diversification within an investment portfolio. Johnston earned a Bachelor of Science in finance from the College of New Jersey.
-
8 Rules for Choosing the Right Financial Adviser
Not all advisers are created equal. Here's how to find one qualified to manage your wealth and protect your legacy. From verifying credentials to trusting your gut, follow these rules to find a financial adviser.
-
A Hated TSA Rule Was Finally Phased Out
After nearly 20 years, the TSA is ending its shoes-off policy. Travelers will still need a Real ID, and advanced screening remains in place. Here’s what to expect on your next flight.
-
Financial Fact vs Fiction: Why Your 'Magic Number' Isn't Actually Magical
Do you think you're diversified if you're invested in the S&P 500 and Nasdaq? Do you think your tax rate will fall in retirement? Think again — and read on for other myths that could be leading you astray.
-
Opportunity Zones: An Expert Guide to the Changes in the One Big Beautiful Bill
The law makes opportunity zones permanent, creates enhanced tax benefits for rural investments and opens up new strategies for investors to combine community development with significant tax advantages.
-
Five Ways Retirees Can Keep Perspective Through Market Jitters
Market volatility is a recurring event with historical precedents (the dot-com bubble, global financial crisis and pandemic), each followed by recovery. Here's how people who are near or in retirement can navigate economic uncertainty.
-
I'm a Financial Strategist: This Is the Investment Trap That Keeps Smart Investors on the Sidelines
Forget FOMO. FOGI — Fear of Getting In — is the feeling you need to learn how to manage so you don't miss out on future investment gains.
-
Can You Be a Good Parent to an Only Child When You're Also a Business Owner?
Author and social psychologist Susan Newman offers advice to business-owner parents on how to raise a well-adjusted single child by avoiding overcompensation and encouraging chores.
-
How Advisers Can Steer Their Clients Through Market Volatility (and Strengthen Their Relationships)
Financial advisers need to be strategic when they communicate with clients during market volatility. The goal is to not only reassure them but to also help them avoid rash decisions, deepen your relationship with them and build lasting trust.
-
The Hidden Costs of Caregiving: Crisis Goes Well Beyond Financial Issues
Many caregivers are drained emotionally as well as financially, leading to depression, burnout and depleted retirement prospects. What's to be done?
-
Cash Balance Plans: An Expert Guide to the High Earner's Secret Weapon for Retirement
Cash balance plans offer business owners and high-income professionals a powerful way to significantly boost retirement savings and reduce taxes.