Sat. Dec 2nd, 2023

I’m Retired and My Accounts Are Losing Money. What Do I Do?

Dear Kristin,

I only have a little money for retirement and am currently retired. My investments are bleeding and have done so all year. I can’t afford to lose everything. The investments are in a mix in a robo account that is balanced. I don’t know what to do. When I have talked to anyone about this, they are just ready to move everything over to their company, so I don’t know what to do.



Dear Retired,

Markets are in a tailspin right now, so I completely understand your frustration as you watch your retirement accounts go lower and lower, and also the reasonable fears and anxieties you have about your remaining funds. 

As the markets take a swing at your retirement savings, you might need to get more flexible with your retirement spending. While it’s generally advised to not withdraw more than 4% of your retirement savings each year, you can extend your savings further by reducing your spending and cutting any unnecessary expenses. 

You say your investments are in a robo account that is balanced, but I’m not sure how balanced it is. As a retired person, it would be wise to reduce the amount of volatile assets in your portfolio, so that your money isn’t at as great a risk when you need it the most. So think less stocks, and more bonds. This way, even as the markets bounce around, you won’t feel the bumps as much. 

While you’re right to be cautious of anyone who just wants to transfer your investments out of the accounts you manage into ones that they do, it doesn’t mean that getting a financial advisor is a bad idea. Investors are struggling to fight against inflation, a bear market, and a potential recession and depending on your circumstances, you might benefit from the added help and experience an advisor could bring.

So how do you choose? Make sure you pick someone reputable, and as they will be helping you with your investments, they need to be registered with the Securities and Exchange Commission (SEC) or the appropriate state securities regulator.1 You’ll want to ask other questions about their compensation, fees, typical clients, philosophy, approach to money, and areas of expertise to ensure they will act in your best interest. More importantly, if it doesn’t feel like a good fit, don’t hesitate to keep searching.

But I want to address your fear that you’ll “lose everything.” You haven’t told me how old you are, so I don’t know if you’re newly retired, or much older, but in either case, chances are you won’t lose everything. I won’t lie to you: There’s a pretty good chance you have seen your assets decline 10% or even more—and they could go lower.2

But if you’ve been investing for a while, even with the losses so far this year, you still have more money than when you started with, right? And there is good news: Bear markets don’t last forever. 

Stocks do usually go up—the question is when, and if you can weather the storm until that day comes. For historical context, bear markets last 289 days, on average.3 And during those bear markets, stocks decline an average of 36%. On the flip side is the bull market, which lasts 991 days on average, or over 2.5 years. Investments usually soar over 110% during a bull market run.4 

A possible recession might make this bear market last longer, but even recessions end after roughly one to two years, according to historical data.5

So ask yourself: ‘Can I hold on for the next year, or two years?” 

Once you make some adjustments to your spending and your portfolio, I have a feeling that you might be pleasantly surprised by the answer to that question. 

And remember, bear markets are normal, and over the next 10-30 years, investors will see many more of them. So markets going down shouldn’t cause you to panic. 

Now take a deep breath. Even though it seems terrifying right now, you and your retirement accounts will be able to get through this.



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