Especially for retirees and those approaching retirement who depend on their portfolios for income. Recent headlines about market swings and the government shutdown have only added to the sense of instability.
While it’s natural to feel concerned, short-term events rarely change the foundation of a well-designed financial plan. Markets have weathered political disruptions, interest-rate changes, and economic downturns before — and they will again. The key is focusing on what you can control.
Here are several ways to help maintain confidence in your income plan during uncertain times:
Depending on a mix of income streams, such as Social Security, pensions, annuities, and investment withdrawals, can help create stability. Diversification allows flexibility when one source is temporarily affected by market changes.
Keeping some funds readily available — even if it’s just a few months of essential expenses — can provide peace of mind and flexibility during market fluctuations. For some retirees, maintaining a larger “cash cushion” of a year or more may make sense; for others, that may not be practical.
What’s most important is understanding your comfort level and cash flow needs, then working with your advisor to determine how much liquidity fits within your overall plan. Even smaller reserves, when paired with a thoughtful withdrawal strategy, can reduce pressure during volatile periods.
If you’re taking regular withdrawals, review your plan with your advisor each year. Small adjustments in timing, tax strategy, or the accounts used can help preserve your portfolio through changing conditions.
Interest-rate shifts have affected bond prices and yields. Reviewing the mix, duration, and structure of your fixed-income investments can help ensure they still align with your goals and risk tolerance.
Events such as government shutdowns, elections, and temporary market declines are part of the investing landscape. A disciplined, long-term plan is designed to withstand them. Avoid reacting to short-term headlines, and focus on the progress toward your broader retirement goals.
Volatility can’t be avoided, but it can be managed. If current events have you questioning your plan, now may be a good time to schedule a review and confirm your income strategy is designed to weather different market environments.