Introduction
Most people save for retirement using market-based accounts like 401(k)s, IRAs, brokerage accounts, and mutual funds. While these tools have growth potential, they also come with risk — especially during retirement years.
A balanced approach can help protect your savings from market volatility.
The Challenge of Market Volatility
Markets go through cycles of growth and decline. While younger investors can often wait out downturns, retirees face a unique risk: sequence of returns risk.
If you withdraw money while the market is down, you may reduce long-term sustainability.
Why Market-Only Retirement Planning Is Risky
1. Losses Hurt More in Retirement
Withdrawals during a market downturn accelerate depletion.
2. No Guaranteed Income
Market accounts do not guarantee lifetime income.
3. Emotional Stress
Constant fluctuations create anxiety for retirees.
4. Taxes Are Unpredictable
Traditional retirement accounts may be taxed at unknown future rates.
5. Longevity Risk
People are living longer, increasing the risk of running out of money.
How Safe Money Strategies Help
Safe money tools — such as Fixed Indexed Annuities — can help:
- Protect principal
- Provide predictable outcomes
- Create guaranteed income (rider fees may apply)
- Reduce sequence of returns risk
- Add stability to retirement planning
These tools do not replace market investments but complement them.
Conclusion
Relying only on market accounts can expose retirees to avoidable risks. A diversified approach that includes protection-based strategies can help create a more stable and predictable retirement.
