Ten weeks of choppy markets. One day you’re down $20,000, the next you’re up $5,000. For anyone watching their retirement portfolio closely, the emotional whiplash can be exhausting. But here’s the good news: If you’re seeing red on your account statement, it might not be as dire as it feels.
Why Losses Feel Worse Than Gains
There’s a psychological reason that downturns feel so gut-wrenching—even when they’re temporary. It’s called loss aversion, and it’s a cornerstone of behavioral finance. Simply put: losses hurt more than equivalent gains feel good. Morgan Housel, in his bestselling book The Psychology of Money, summed it up this way:
“Organisms that treat threats as more urgent than opportunities have a better chance to survive and reproduce.”
That instinct might have served our ancestors well on the savanna—but it wreaks havoc in the stock market. If you feel worse about losing $10,000 than you feel good about gaining the same amount, you’re not alone. But emotional investing is rarely successful investing.
Where Are We Now?
As of writing, the S&P 500 and other major indices are hovering near flat for the week, but still show losses over the past one month, six months, and year-to-date. That kind of volatility can rattle even seasoned investors, especially those nearing or in retirement.
If you have a portfolio of $500,000—an amount many financial professionals consider a strong retirement base—you might be down around $25,000 from earlier highs. Naturally, that might lead to worry, especially with negative headlines dominating the airwaves.
President Donald Trump recently addressed the economic strain on American households, referencing inflation and supply chain issues that are leaving families with “fewer toys” and rising costs. While these statements reflect real challenges, they also add to investor anxiety.
But is it time to panic?
Why Financial Advisors Aren’t Panicking Yet
According to several seasoned financial professionals, the answer is a resounding no.
“This isn’t even close to a real correction,” said David Demming, a financial advisor based in Ohio. “My clients’ portfolios are down maybe 1% to 2%.” Source: MarketWatch
Demming, who’s guided clients through Black Monday in 1987, the dot-com bust, the 2008 financial crisis, and COVID-era volatility, emphasizes that real bear markets can mean drawdowns of 20%–40%. This isn’t that.
How Advisors Stress-Test Retirement Portfolios
Most advisors use sophisticated planning software to run what’s known as Monte Carlo simulations—a fancy term for calculating how a portfolio might perform across hundreds or thousands of different market scenarios.
What they’re really looking for is the probability of success: the likelihood that a retiree’s nest egg will sustain them through life, factoring in spending, inflation, and expected Social Security income. A plan that scores 80% or higher is generally considered healthy.
“Short-term downturns rarely move the needle,” said Rodney Loesch, a Certified Financial Planner based in Missouri. “A 10-week market slide might feel long emotionally, but in the context of a 30-year retirement, it barely registers.”
Some advisors aim even higher. Gregory Furer, CEO of Beratung Advisors in Pittsburgh, says his firm doesn’t consider a plan “on track” until it hits at least 82% probability, with 90%+ offering the greatest peace of mind.
“Most of our clients are surprised at how little a 5% or 6% pullback affects their long-term outlook,” Furer told MarketWatch. “If they’re already at 90%, their probability barely budges.” Source: MarketWatch
DIY Retirement Planning: What to Watch
If you don’t work with a financial planner, most brokerage platforms now offer their own free or low-cost tools to simulate your retirement outlook. You’ll need to enter:
- Current savings
- Expected annual contributions
- Target retirement age
- Desired retirement spending
- Investment mix (stocks, bonds, etc.)
These tools will often show a confidence score or success probability, giving you a sense of how resilient your plan is to market volatility.
If your score hovers around 80%, that’s a solid foundation. But as Edward Franklin Thomas, a financial advisor in Alabama, notes, this is a good time to review what “levers” are available:
- Can you contribute more now?
- Can you push back retirement a few years?
- Should you adjust your stock/bond allocation?
Even modest adjustments can boost your odds dramatically.
Market Volatility ≠ Retirement Emergency
“The real threat isn’t the market,” says Brandon Garrett, an advisor based in Texas. “It’s being forced to sell at the wrong time.”
That’s why most advisors recommend keeping 6–12 months of expenses in cash or low-risk assets—so you don’t need to sell stocks in a downturn. Garrett emphasizes the importance of fixed-income buffers and thoughtful spending plans.
Ryan Salah, another advisor in Maryland, echoed this view. His firm doesn’t react to volatility within expected ranges.
“Unless a client’s goals, values, or income sources change dramatically, we stay the course,” he said. “This is exactly what a stress-tested plan is built to handle.”
What Really Moves the Needle
While markets may feel like the biggest risk, many planners argue that personal factors matter more:
- Your health: Chronic illness can increase retirement expenses dramatically.
- Retirement age: Retiring at 62 versus 67 can be the difference between success and shortfall.
- Social Security timing: Claiming benefits at 70 rather than 62 can increase lifetime payouts by 76%.
- Spending habits: Your lifestyle decisions have far more influence than short-term S&P returns.
“The market matters,” said Sean Pearson, a Pennsylvania-based advisor. “But not nearly as much as when you retire, how long you live, or when you start Social Security.”
Historical Context: Perspective Matters
To put recent volatility in context, let’s look at a few key historical downturns:
- 1987 (Black Monday): The Dow dropped 22% in one day. But the market fully recovered within two years.
- 2000–2002 (Dot-com Crash): The Nasdaq lost 78%. Investors who stayed diversified and held through recovered.
- 2008–2009 (Financial Crisis): Markets dropped 50% but rebounded with one of the longest bull runs in history.
Today’s mild correction barely registers in comparison.
What Investors Should Do Right Now
- Don’t panic sell. History shows markets recover. Knee-jerk selling locks in losses.
- Rebalance if needed. If market moves skew your allocations, rebalancing can reduce risk.
- Evaluate your cash buffer. Having a year of living expenses in cash can buy peace of mind.
- Review your success probability. Use planning software or work with an advisor.
- Focus on what you can control. Saving rate, expenses, asset allocation, and working longer if needed.
Bottom Line
Ten weeks of stock market losses might feel painful, but they’re not likely to jeopardize a well-structured retirement plan. The key is preparation—not reaction. As long as your retirement strategy is stress-tested, diversified, and based on realistic assumptions, short-term market dips are just noise in a long-term journey.
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