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Retirement Withdrawals during a Downturn? 3 ways to protect your assets.

In times of economic uncertainty, the worry of depleting one's financial assets looms large for many. With the ever-present threat of a down market, it's crucial to adopt strategies that safeguard against the risk of overdrawing from your accounts during retirement. We’ve identified three crucial strategies that you can use to maximize the value of your assets during retirement: identifying your sustainable withdrawal rate, employing a dynamic withdrawal strategy, and making purposeful investments. 

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Identifying Your Sustainable Withdrawal Rate 

The one-size-fits-all 4% rule is now considered outdated, while it’s a good starting point, it’s only a piece of the puzzle for a long and prosperous retirement. You’ve worked hard building up your assets, we can’t cut corners not that it’s time to use them. We now suggest that a range of factors should influence your specific withdrawal rate. Key considerations include your desired legacy level, the level of certainty you desire, and the flexibility you want allowed in your spending.  

Consider other sources of income such as social security, pensions, and annuities. Maybe you retire early and want to wait to take these guaranteed benefits. Your starting withdrawal rate might seem unsustainable but you need to think of it as a bridge to your later years when these benefits kick in. Incorporating these insights into your retirement planning can lead to a more tailored and sustainable withdrawal strategy, ensuring your financial stability throughout retirement. 

Finding Your Strategy

Employing a Dynamic Withdrawal Strategy 

A withdrawal plan is not the same as a withdrawal strategy. You could put in the hours on day one and come up with the perfect plan for withdrawals during retirement but when surprises happen be left unprepared. The key to a strategy is having set parameters that help dictate decisions around your income and investments.  

One of these can be as simple as adjusting the amount of your withdrawals for inflation. This will help maintain your purchasing power and in times of low inflation will help you preserve your invested capital. Another strategy is implementing guardrails to your strategy. Start with your strategic withdrawal percentage and adjust based on the predetermined upper and lower boundaries of your portfolio. This creates a flexible yet still structured sequence of withdrawals that can help avoid the risk of pulling too much from your account on a down year.

Hitting Your Target

Making Purposeful Investments

In times of economic downturns, the art of making purposeful investments becomes more crucial than ever. It's not just about safeguarding your portfolio; it's about strategically positioning it to weather storms and capitalize on eventual recoveries. 

Certain sectors, such as healthcare and consumer staples, have historically shown resilience in recessions. These sectors cater to essential needs, maintaining demand even when discretionary spending declines. Investing in funds or stocks within these sectors can provide a buffer against market downturns. For a more nuanced approach, consider fixed-income and dividend-yielding investments for steady returns. 

Even cash, which is objectively a terrible long-term investment has its place in a well-planned portfolio. It offers liquidity and flexibility, allowing you to cover expenses without liquidating other investments at a loss. Moreover, holding a portion of your portfolio in cash or cash equivalents enables you to seize investment opportunities as they arise, buying quality assets at lower prices. 


Navigating a down market without jeopardizing your financial future requires a calculated, informed approach. By identifying a sustainable withdrawal rate, adopting a flexible withdrawal strategy, and making thoughtful investment choices, you can protect yourself against the risk of overdrawing from your accounts. These strategies not only offer a roadmap for financial resilience during challenging times but also empower you to make decisions that align with your long-term financial well-being. 

Remember, financial planning is not a set-and-forget endeavor. It demands ongoing attention and adaptation to both personal life changes and shifts in the broader economic landscape. Consulting with a financial advisor can provide tailored advice and help you adjust your strategies as needed to ensure that you're always moving in the right direction. Your financial security is paramount; with the right strategies in place, you can face market fluctuations with confidence and grace. 

Book a complimentary consultation to review your current income strategy below!



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