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A major stock market crash could get in the way of your retirement plans.
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You can protect yourself from a market crash by shifting into more stable assets when you’re older.
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It’s also important to stockpile cash as a retiree.
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Read: I Review Investing Platforms for a Living, And SoFi Crypto Finally Changed My Mind
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Investing in the stock market involves risk, and market downturns can happen unexpectedly, causing portfolio values to fall sharply.
That’s stressful enough when you’re still working and building retirement wealth. But when you’re already retired and relying on your savings as your sole source of income, a major market decline can have a much bigger impact.
A major market downturn doesn’t necessarily mean a 50% drop. Even a decline of 20% or 25% can do meaningful damage to a retirement portfolio, which is why it’s important to plan for that possibility in advance.
In this Reddit post, the OP wonders how a stock market crash might impact their retirement plans. It’s a very real and valid concern. But there are ways to protect yourself in that situation.
This post was updated on April 10, 2026.
When building wealth for retirement, many investors keep a larger portion of their portfolio in stocks because stocks have historically offered stronger long-term growth potential. Once retired, many people choose a more balanced mix of stocks, bonds, and cash to reduce the impact of market volatility.
The reason? At that stage of life, you’re using your savings for income. That’s why having an extremely stock-heavy portfolio in retirement can be risky, especially if you may need to withdraw money during a downturn. If you’re forced to sell stocks at a loss to cover living expenses, that can hurt your portfolio’s long-term sustainability.
One common approach is to gradually reduce stock exposure as retirement approaches so that your portfolio includes a larger share of bonds and cash by the time you begin taking withdrawals.
Then, if stocks fall sharply, you may be able to draw from bond income or other lower-volatility assets instead of selling stocks at depressed prices. Bonds don’t always move in the same direction as stocks, which is why they can help reduce overall portfolio volatility. Bond prices can also decline, especially when interest rates rise, but they often behave differently from stocks and can still play an important stabilizing role in a portfolio.
