By: William Hinder, EA | May 20th, 2025
When people ask me, “Can I retire if there’s a stock market crash?”, what they’re really asking is, “Will I be okay if the market tanks right as I stop working?”
Totally valid concern.
The years right before and after retirement—what we like to call the “fragile decade”—can make or break your retirement income plan. That’s because market downturns during this window can have a serious impact on how long your money lasts. If the market drops early in your retirement and you’re forced to sell investments to pay the bills, it’s a tough road back.
But here’s the good news: With the right plan in place, you can retire confidently, even in the middle of a stock market crash.
Let me walk you through what that looks like.
The “Fragile Decade” refers to the five years before and after retirement—basically, the 10-year window where bad market timing can hurt the most.
If your portfolio takes a hit early in retirement and you’re withdrawing from it to cover your expenses, those losses are much harder to recover from. That’s why it’s critical to structure your income in a way that doesn’t force you to sell during a down market.
Too many people approach retirement with vague ideas like “I’ll just pull from my IRA when I need it” or “I’ll rely on Social Security.”
That’s not a plan.
You need to map out different income streams, consider worst-case market scenarios, and understand exactly how much you’ll need and where it’s coming from.
Market crashes happen. Inflation happens. Life happens.
A detailed Retirement Analysis accounts for all of it—not just the sunny days.
When I talk about diversification, I don’t just mean your portfolio allocation. I’m talking about income sources as well.
In retirement, you want multiple streams coming in: Social Security, pension, rental income, investment income, maybe even part-time work or a small business. That way, when the market dips, you have other “buckets” to draw from. (Read more about The Bucket Strategy HERE!)
We really like to see at least three different sources of income in retirement.
This gives you options. And options equal control.
Even if the market averages 7% over time, that doesn’t mean you’ll get 7% every year. In fact, if you get negative returns in the early years of retirement, that average becomes irrelevant.
It’s not just about how much you make—it’s when you make (or lose) it.
Your plan needs to be resilient enough to absorb a few bad years without blowing everything up. That might mean keeping more cash on hand or using guaranteed income sources early on.
If you’re retiring soon, don’t assume everything will go according to the long-term averages. Be conservative with your projections. Expect some bad years. Build in margin.
We don’t just get a nice even 6–8% every year. That’s just not how the stock market works.
And you shouldn’t plan like you’re going to get average returns because the stock market is anything but average.
This isn’t theory—here’s what it looked like in practice.
A couple, ages 54 and 53, planned to retire at 62. They had $325,000 in savings, expected Social Security to pay $4,766/month, a $1,500/month pension, and $350/month in rental income. Their expenses? About $4,000/month.
Fast-forward to retirement: Imagine the market crashes four years in a row right after they stop working. We’re talking Great Depression-level declines: -9.1%, -11.6%, -2.4%, and -4.8%.
Sounds like a retirement killer, right?
And yet, they were fine.
Why? Because their income plan didn’t rely entirely on their investments. Their Social Security, pension, and rental income covered a big chunk of expenses, so they didn’t have to sell investments at a loss. Even after a $240,000 hit to their portfolio, they stayed retired—and still had plenty of assets left after 30+ years.
The lesson here isn’t “don’t worry about a crash.”
The lesson is: Be prepared for it.
Have guaranteed income streams. Build in buffers. Use conservative return estimates. Diversify where your money comes from. That’s what makes your retirement plan resilient—even when the market isn’t.
Regardless of what happens in the stock market, the couple above’s retirement income plan will hold up because they have more flexibility.
A stock market crash doesn’t have to ruin your retirement. But ignoring the risk definitely could.
The people who make it through market storms aren’t just lucky—they’re prepared. They planned around volatility, built income layers, and gave themselves options.
If you’re within 10 years of retirement and your current strategy is basically “hope the market holds up,” we should talk.
Let’s build a plan that holds up even when the market doesn’t.
You’ve worked too hard to leave this to chance.
📺 If you like this content don’t forget to subscribe to our YouTube channel for more!
