Iran War Volatility Puts Near-Retirees at Risk: Why ‘Staying the Course’ Fails Now

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The ongoing conflict in Iran has been causing major market swings, and for investors nearing retirement, those swings can permanently change how long a portfolio lasts.Find Out: The Money You Need To Save Monthly To Retire Comfortably in Every State Read Next: 8 Clever Ways Retirees Are Earning Up To $1K per Month From Home Here’s what you need to know if you’re planning to retire soon.Your investing strategy should depend on your retirement timeline, so the advice that works for those decades away from retirement might not be applicable if you’re just a few years away.“Staying the course is great advice if you are mid-career with decades of working ahead of you, but if retirement is five to 10 years away, your strategy may change,” said Jamie Hopkins, CFP, CEO of Bryn Mawr Trust Advisors. “However, it’s important not to make emotional decisions.”The key issue for near-retirees is timing.“If markets drop sharply right before or right after you retire and you are pulling money out of your portfolio to cover living expenses, you do not have the time to wait for a recovery the way a younger investor does,” Hopkins said.“If recent volatility has you losing sleep, pay attention to that feeling,” he continued. “It may be telling you that you are carrying more equity risk than is appropriate for someone on the doorstep of retirement.”Still, reacting too aggressively can do more harm than good.“Making emotional decisions that pull you out of the market at exactly the wrong time is still one of the biggest wealth destroyers in any market downturn,” Hopkins said, “but staying the course should not become an excuse to avoid asking whether your current allocation still makes sense for where you actually are in life.”Learn More: Warren Buffett’s Advice To Prepare for a Recession Is S-Tier For investors within a decade of retirement, today’s volatility may warrant careful adjustments — but not hasty moves.“Geopolitical events create real short-term volatility, but they rarely change the long-term trajectory of U.S. markets,” Hopkins said. “Data going back to WWI shows markets are resilient — up a median of about 5% six months after major geopolitical shocks. The bigger risk for most investors is making an emotional decision that gets them out of the market at the wrong time.”Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoTrending tickersMETA Meta Platforms, Inc. 662.49 +27.96 (+4.41%)AVGO Broadcom Inc. 380.78 +1.03 (+0.27%)IONQ IonQ, Inc. 35.76 +6.00 (+20.16%)QBTS D-Wave Quantum Inc. 16.97 +2.32 (+15.84%)SNAL Snail, Inc. 1.7000 +1.3230 (+350.93%)PortfolioSign in to access your portfolioSign inTop gainersTVTX Travere Therapeutics, Inc. 42.13 +11.43 (+37.23%)XNDU Xanadu Quantum Technologies Limited 14.83 +3.34 (+29.07%)BE Bloom Energy Corporation 219.03 +42.36 (+23.98%)IONQ IonQ, Inc. 35.76 +6.00 (+20.16%)CRDO Credo Technology Group Holding Ltd 159.52 +25.16 (+18.73%)Top losersKMX CarMax, Inc. 41.66 -7.42 (-15.12%)FSLY Fastly, Inc. 20.95 -3.42 (-14.03%)ASTS AST SpaceMobile, Inc. 88.57 -10.40 (-10.51%)DOCN DigitalOcean Holdings, Inc. 73.45 -6.42 (-8.04%)VAL Valaris Limited 92.01 -7.06 (-7.13%)Most activeNVDA NVIDIA Corporation 196.51 +7.20 (+3.80%)INTC Intel Corporation 63.81 -1.39 (-2.13%)NOK Nokia Oyj 10.35 -0.02 (-0.19%)AAL American Airlines Group Inc. 12.13 +0.90 (+8.01%)PLUG Plug Power Inc. 2.9400 +0.1700 (+6.14%)Top economic eventsEarnings eventsMy earnings eventsEarnings events