As we look back on 2025 so far, it might be easy to forget just how much volatility the markets experienced. It’s been a crazy year, at least as far as the headlines are concerned.
Volatility is a fact of life in investing. Some years are smooth. Others come with wild swings, scary headlines, and a wave of emotions. When the markets get choppy, the phone usually rings.
That’s a good thing. We want our clients to call whenever they need clarity or reassurance. It’s a chance to talk through what’s happening (not just in the markets, but in their own lives) and make sure their plan still fits.
Reassurance aside, we also want every client to be regularly reminded that we plan for volatility as a when, not an if. As a refresh, let’s take a look at what that looks like strategically, including at different stages of your financial journey.
If You’re Far from Retirement: Grow With a Safety Net
If you’re 10, 15, even 20 years away from retirement, you should expect volatility. If history tells us anything, expect more than the routine reaction to headlines. Real drawbacks happen over the decades. You’re likely to experience at least one.
At this stage, you’re focused on growing wealth. That means your portfolio will usually lean more heavily toward stocks and other growth assets, but that doesn’t mean you’re unprotected.
Here’s how we often structure it:
- Emergency reserves: We always want to see basic liquidity. If your car dies or the roof needs replacing, you shouldn’t have to sell investments at a loss to cover it. More significant might be something like layoffs with sustained gaps in income. Between liquid assets and lines of credit, we want to know where our emergency income is coming from.
- Planned expenses: Big family trips, tuition, or milestone celebrations (like a 25th anniversary getaway) need to be factored into your plan. If you're investing for long-term growth, we want to make sure short-term priorities are covered with lower-risk dollars.
- Perspective: One of the most common conversations we have during a downturn is simply this: “You haven’t lost anything because you’re not selling.” The plan gives you permission to stay patient.
Bottom line: At this stage, your greatest advantage is time. We generally want to avoid having to sell any long-term investments to cover short-term needs.
If You’re Nearing Retirement: Protect the Transition Window
The five years before and after retirement are some of the most financially sensitive years you’ll experience. We call this the retirement red zone because what happens here can have an outsized impact on the rest of your retirement.
If the market drops 30% right when you’re about to start drawing from your investments, that’s not just anxiety. It can do long-term damage to your plan. So, we structure things differently:
- 3–5 years of protected cash flow: This is money set aside in bonds, CDs, annuities, or cash, not exposed to the stock market.
- Bucket structure: We build layers of capital, some for the near term, some for the long term, so you’re not relying on any one account to do everything.
- Tax strategy coordination: We work across accounts to make sure income is tax-efficient while still giving you the flexibility to access what you need.
The closer you are to retirement, the more structure and intentionality you need. You can’t afford to skip the strategic lens through this transition.
If You’re In Retirement: Create Margin and Stay Nimble
Once you're retired, the priority shifts to sustainability. The market doesn’t stop moving, but your income needs to be steady. Here’s how we approach this:
- Reliable sources of income: Whether it's Social Security, pension, annuity income, or systematic withdrawals, we want to know where your income is coming from year by year.
- Minimize forced selling: When the markets are down, we want to avoid selling growth assets at a loss. That’s why we keep several years of income in safer places.
- Ongoing review: Retirement isn’t static. If your goals change (a big trip, a wedding, or helping the next generation), we build that into the plan early so we’re not scrambling when the market isn’t cooperating.
The plan needs to protect your income and your peace of mind. That comes from smart allocation, clear cash flow, and intentional conversations about what matters most in this season of life.
Final Thoughts: Volatility Isn’t the Enemy. Unpreparedness Is.
The markets will move. Some days will be up, some down. That part’s not new. The real question is whether your financial plan is built to handle it (and are we sticking to it?) or whether you’re making it up as you go.
Our approach is simple:
Plan for volatility before it happens. Build cash flow buffers. Protect what needs protecting. And don’t try to guess the next move.
If you’re wondering whether your plan is built to handle the kind of year we’ve had—or the kind of year we might have next—we’re here to help.