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 With that withdrawn money gone forever, when the remaining account balance potentially rebounds, the gains will be muted.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.
-
119 JCPenney Stores Just Sold — Here’s What Shoppers Should Know
The $947 million JCPenney deal hints at bigger retail and real estate shifts.
-
Top Four Retirement Withdrawal Strategies to Maximize Your Savings
These retirement withdrawal strategies avoid tax and stock market pitfalls that can eat into your savings.
-
How Much Income Will an Indexed Annuity Get You? An Annuities Expert Lays Out the Numbers
Guaranteed lifetime income sounds great, but how much will it be? Several factors determine your future payout on indexed annuities with an income rider.
-
Financial Fact vs Fiction: Why Inflation Is Lower, But Prices Are Not
Do you think bonds protect you from stock losses? Are you confident your assets will go to your intended heirs if all you have is a will? Think again — and read on for other myths that could be leading you astray.
-
I'm a Personal Finance Expert: Here's the Truth About Using AI to Plan Your Retirement
AI can be a useful tool, but it often gets important financial information wrong. It also can't emulate the empathy, judgment and personal connection you can get with a human being.
-
You Don't Have to Be Wealthy to Need a Wealth Manager
Navigating complex financial decisions is hard on your own, no matter how much money you have. A wealth manager can provide comprehensive financial planning, investment management, risk management and more.
-
Despite Tariffs, These Investment Experts Are Bullish on European Equities
European equities were one of the better-performing investments during the first half of 2025. They could be a good long-term prospect for U.S. investors needing to diversify, according to these investment managers.
-
How Do You Know You Are Ready for a Gray Divorce? 15 Yes-or-No Questions
As more people 50 and older get divorced, many splits are initiated by women who want a new path. Answer these 15 questions to see if you might need to think about how you should move forward.
-
'Buy Now, Pay Later' for Everyday Spending? This Financial Pro Thinks It's Risky
'Buy Now, Pay Later' apps can get you out of a jam when you need money quickly. But using them regularly for small purchases could create problems.
-
Five Things to Consider Before Rolling Your 401(k) into a Roth IRA
Converting at least some of an old 401(k) to a Roth IRA can offer long-term tax benefits and retirement flexibility, especially if you anticipate being in a higher tax bracket later or wish to leave a tax-free legacy.