If you are within 10 years of retirement, the risks of staying fully invested in the stock market far outweigh the potential rewards. Here are five compelling reasons to consider shifting at least a portion of your savings toward safe-money strategies before you retire.
1. Sequence of Returns Risk Is Real and Devastating
This is the most important concept most people have never heard of. Sequence of returns risk refers to the danger of experiencing major market losses in the early years of retirement while simultaneously withdrawing money from your portfolio.
Here is the problem: a 40% market drop followed by withdrawals can permanently cripple your portfolio — even if the market fully recovers years later. The order of returns matters enormously when you are spending down savings. A 30-year-old can afford to ride out a crash. A 65-year-old cannot.
Research shows that a significant market downturn in the first five years of retirement can reduce a portfolio's longevity by 10 years or more — even if average returns over the full period are positive.
2. You Have Less Time to Recover
When you are working and saving, a market crash is painful but manageable. You stop contributing, you wait, and eventually the market recovers. But when you are retired and drawing income every month, there is no waiting. Every withdrawal during a down market locks in losses and leaves less money available when the recovery comes.
3. Safe Money Strategies Still Grow
Many people resist moving money out of the market because they worry about giving up growth. But fixed indexed annuities have historically outperformed CDs and savings accounts significantly — while offering full principal protection. You do not have to choose between growth and safety. The right safe-money product gives you both.
4. Peace of Mind Has Real Financial Value
Financial stress is one of the leading causes of health problems in retirees. When you watch your retirement savings swing up and down with the market, it affects your sleep, your health, and your quality of life. Knowing that your principal is completely protected — and that your income is guaranteed — changes everything. That is not a small thing. That is priceless.
5. Guaranteed Income Changes How You Live in Retirement
When your essential monthly expenses are covered by guaranteed income that cannot go down regardless of the market, you are free to leave your remaining market investments alone during downturns. You stop making emotional decisions. You stop panic-selling at the worst possible time. Your overall financial plan becomes dramatically more resilient.
This Is Not All or Nothing
Moving some money to a safe-money strategy does not mean abandoning the market entirely. Many of our clients keep a portion of their savings invested for growth while protecting another portion with a fixed indexed annuity. The annuity becomes the foundation that makes everything else more stable.
At Brsan Financial, we help you find the right balance based on your specific timeline, income needs, and comfort with risk. There is no one-size-fits-all answer — but there is always a smarter strategy. Let us show you yours.