Avoiding Market Risks in Retirement

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When it comes to retirement planning, one of the most common—and costly—mistakes is adopting a “set it and forget it” approach to your investments. While the idea of putting your money to work and leaving it alone may seem appealing, especially when life gets busy, failing to regularly review and adjust your strategy can expose you to unnecessary market risks.

In this article, we’ll explore how overlooking investment reviews, insurance updates, and risk exposure can derail even the most well-intentioned retirement plans. We’ll also show you what the market has really done over the last 25 years—and why your plan should be built on more than optimistic assumptions.

The Set-and-Forget Trap

If your advisor hasn’t spoken with you in over a year—or if your retirement accounts are simply on autopilot—it’s time to rethink your strategy.

The “set-it-and-forget-it” method might sound convenient, but it can leave your portfolio outdated and unprepared for the realities of retirement. Your financial picture changes as you get older, and so should your investment strategy.

Regular check-ins help ensure:

• Your risk tolerance aligns with your age and lifestyle
• Your assets are diversified appropriately
• You’re positioned to avoid sequence of returns risk
• You’re on track to meet your income needs in retirement

An annual meeting with a financial professional is a minimum benchmark. Anything less may indicate that your current advisor isn’t providing the level of support you need.

Are You Losing Money Without Realizing It?

Even during periods of market growth, many investors unknowingly miss out on opportunities—or worse, expose themselves to losses—simply because they fail to reassess their positions.

If your retirement plan is based on outdated assumptions, you might be:

• Overexposed to equities late in life
• Paying hidden fees or costs that chip away at returns
• Holding life insurance that no longer fits your needs
• Failing to protect against market downturns during income withdrawal years

In retirement, the order in which returns occur—known as sequence of returns risk—can make or break your plan. A market loss early in retirement can have a far greater impact than the same loss later on. If you’re not adjusting for this, you’re potentially putting your entire financial future at risk.

What the Numbers Say: 25-Year S&P 500 Performance

To provide some historical perspective, let’s review the approximate performance of the S&P 500 Index over the past 25 years.

From 2000 through 2024, the S&P 500 experienced significant market events, including the dot-com bubble, the 2008 financial crisis, and the COVID-19 pandemic. Despite these fluctuations, the average annual return during this 25-year period was approximately 5%, based on historical data compiled from publicly available sources.

This average includes both positive and negative years and is intended to demonstrate long-term performance trends—not as a guarantee of future results.

The chart below illustrates how a hypothetical $100,000 investment in the S&P 500 at the beginning of 2000 would have grown over time, assuming annual compounding and no withdrawals:

life insurance: Set and Forget? Think Again

Just like your investments, your life insurance strategy shouldn’t be on autopilot. If it’s been more than a few years since your last policy review, here’s what you might be missing:

• More cost-effective options with better benefits
• Living benefit riders that provide flexibility during retirement
• Coverage that no longer reflects your income or legacy goals
• Changes in your health that affect underwriting opportunities

life insurance can serve as a powerful tool for tax-free income, estate planning, and long-term care funding—but only if it’s structured correctly.

Five Smart Ways to Reduce Market Risk in Retirement

Avoiding market risks doesn’t mean avoiding the market altogether. Instead, it means making smarter, more strategic decisions that balance growth and protection. Here are five ways to do that:

1. Get a second opinion

If your advisor hasn’t proactively reviewed your plan recently, seek a second opinion from a licensed, independent financial professional. A fresh perspective can help identify hidden risks.

2. Consider income-focused vehicles

Annuities and other protected income tools can help reduce reliance on market-based withdrawals, especially during volatile periods.

3. Review your portfolio annually

Make sure your asset allocation still matches your risk profile. A 60/40 portfolio at 45 may not make sense at 65.

4. Prepare for inflation and taxes

Long-term retirement success depends on maintaining purchasing power and managing tax liabilities. Strategies like Roth conversions and tax-efficient withdrawals can help.

5. Protect against downside risk

Explore strategies that include volatility buffers, principal protection, and structured income guarantees.

Retirement Planning Is Not One-and-Done

Financial plans are living documents. Your life evolves—and so do markets, tax laws, and healthcare costs. What worked 10 years ago may no longer be enough. And if your advisor isn’t meeting with you regularly, you may already be falling behind.

Don’t assume everything is “fine.” Be proactive, stay informed, and get expert input. A small adjustment now can prevent a costly mistake later.

Final Thoughts

Avoiding market risks in retirement isn’t about timing the market—it’s about designing a strategy that grows with you and protects what you’ve built. The “set and forget” mindset might feel simple, but true peace of mind comes from ongoing review, informed adjustments, and guidance you can trust.

Need Expert Guidance?

For personalized financial advice, connect with a professional today. Visit our “Find a Financial Professional” section to get started. If you prefer a personal referral for your first appointment, call us at 877.476.9723 or contact us here to schedule a meeting with a trusted and licensed independent financial professional.

🧑‍💼 Authored by Brent Meyer, founder and president of SafeMoney.com. With over 20 years of experience in retirement planning and Annuities, Brent is dedicated to helping you secure your financial future. Discover more about his extensive expertise here.

Disclaimer: This article is for informational and educational purposes only and should not be considered financial, investment, or insurance advice. Always consult with a licensed financial professional before making any decisions. Past performance is not indicative of future results. All investing involves risk, including the possible loss of principal.

The Return of Competitive Safe Money Rates in 2026

One of the most significant changes for retirees in recent years: the return of meaningful interest rates on guaranteed products. Fixed annuities and Multi-Year Guaranteed Annuities (MYGAs) — which were largely unattractive during the near-zero rate era — are now offering 4.5–5.5% guaranteed returns for 5-year terms as of 2026. This changes the safe money conversation: retirees no longer face a binary choice between "growth (risky)" and "safety (nothing)." Guaranteed products now provide competitive returns without downside exposure, making the "set it and forget it" temptation even more costly — because the safe alternative actually competes with market returns on a risk-adjusted basis.

Frequently Asked Questions About avoiding market risks in retirement dont set and forget

What are safe money alternatives for retirement planning?

Safe money alternatives for retirement planning include fixed annuities, cash value life insurance, and high-yield savings accounts. These options provide stability and can help protect your retirement savings from market volatility. They are designed to preserve your principal while offering some level of growth.

How can I avoid market risks during retirement?

To avoid market risks during retirement, consider diversifying your portfolio with safe money alternatives alongside your investments in stocks. Regularly reviewing and adjusting your asset allocation can help you maintain a balance that suits your risk tolerance. Additionally, setting up a systematic withdrawal plan can provide consistent income without exposing your savings to market fluctuations.

Is it wise to 'set and forget' my retirement investments?

No, 'set and forget' is not a wise strategy for retirement investments. Market conditions change, and your financial needs may evolve over time, requiring adjustments to your investment strategy. Regularly monitoring your portfolio and making necessary changes can help you stay on track for a secure retirement.

What should I consider when choosing fixed annuities for retirement?

When choosing fixed annuities for retirement, consider factors such as the interest rate, the financial strength of the issuing company, and any fees associated with the annuity. It's important to understand the terms of the contract, including surrender charges and payout options. Consulting with a financial advisor can help you select the right fixed annuity that aligns with your retirement goals.

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