How Can You Protect Your Retirement from Market Volatility Right Now?

Jeremy Keil explores Barron’s 5 strategies to respond to market volatility with your retirement portfolio. Are you feeling nervous about what today’s market volatility could mean for your retirement? You’re not alone. A recent Barron’s article titled “Market Anxiety Is Running High. How to Secure Your Retirement Portfolio” caught my attention—not just for the headline, but because it echoes what I hear from so many of you. Retirement can already feel uncertain, and when the stock market adds another layer of unpredictability, it’s natural to start asking: “What should I be doing with my investments?” Let’s explore five strategies—based on that Barron’s article and my own experience as a retirement-focused financial planner—that you can use to help protect your retirement income from the ups and downs of the market. 1. Be Realistic About Market Returns The last decade has seen significant growth for the stock market. From 2009 to 2024, returns were some of the strongest in history. But expecting this trend to continue indefinitely could lead to disappointment. In fact, projections from Morningstar suggest that U.S. equities could return just 3.4% to 6.7% annually over the next decade. Compare that to the roughly 20% growth we saw in 2023 and 2024, and it's a sobering reality check. Being realistic doesn’t mean avoiding stocks altogether—it means adjusting your expectations and preparing for a range of outcomes. 2. Get Your Asset Mix Right (Based on When You Need the Money) While it may be tempting to invest based on how the market is performing at the moment, Barron’s suggests that your personal needs with your investment should be high on the list of drivers in your investment strategy. Your short-term money (needed within 1–3 years) could be in short-term, stable investments. Long-term money (needed 10+ years out) could go toward growth-oriented investments like stocks. Too often, I see people keeping everything in the market when they’re just a year away from retirement, hoping for “one more good year.” And sometimes it backfires—just like it did in early 2020 when COVID hit, and the market took a steep dive. Plan ahead. By adjusting your retirement investments 3 three years before your retirement date, you could have more of a buffer, just in case you retire earlier than expected. 3. Diversify and Rebalance It’s tempting to stick only with what’s worked recently—especially U.S. stocks, which have produced strong returns since 2009. But diversification means having exposure to different areas of the market, including international stocks. And while international stocks have lagged in recent years, 2025 has shown a surprising shift: as of early June, international indexes are up nearly 19%—ahead of the S&P 500's 2% gain. You never know when one part of your portfolio will outperform. That’s why it’s important not just to diversify, but also to rebalance—systematically adjusting your investment strategy to maintain your target allocation. 4. Maintain a “Goldilocks” Level of Cash Cash can earn some decent interest—around 4% as of 2025. That doesn’t necessarily mean you should pile all your money into savings, but it does mean you have the option to keep a portion of your retirement funds in cash or high-quality bonds for short-term needs. How much cash is enough? Many financial advisors recommend keeping 1 to 5 years’ worth of withdrawals in cash or short-term investments. The right number for you depends on your retirement timeline, expenses, and risk tolerance. 5. Bolster Other Sources of Income One of the most underappreciated strategies for navigating market volatility is increasing your guaranteed income. That could include: Delaying Social Security to maximize your benefit Maximizing your pension payout, if available Exploring annuities to create additional income streams I know the word “annuity” often brings up mixed feelings.