The Importance of Staying Invested Up–and Through–Retirement
The possibility–and fear–of outliving one's retirement finances are real. Because many of us will have to support 20 to 30 years of spending in retirement, Belinda Sherman, Director of Product Management and Financial Planning suggests staying invested after your working days are over.
By Belinda Sherman, CFP®
Director of Product Management and Financial Planning, Huntington Financial Advisors
For some, it may seem counterintuitive to hold growth-oriented investments when nearing, entering or even in retirement. In fact, we often see clients cash out of the investments in their 401(k) or other accounts prior to retirement in an effort to preserve what they have accumulated. There are many hard decisions to make for a successful retirement and balancing risk is one of them. It may make sense to scale back, but unless you have saved more money than you will need, cashing out of all of your investments may not.
Stay Invested
The statistics show that people who reach 65 have a good chance of seeing 80 and older†, which is great, but also can present a challenge: Many of us will have to support 20 to 30 years of spending during retirement. And because of the increasing cost of goods and services over time, it’s important to stay invested.
That doesn’t necessarily mean we should invest as we did in our early working years. It is smart to maintain enough in safe, liquid accounts for a few years’ worth of retirement income, and invest the rest in a way that aligns with the timing of your goals. For example, consider conservative investments to cover short- and mid-term goals that are less than five years out, and growth-oriented investments for longer-term goals.
Tune Out the Noise and Stay the Course
Managing your own money can be stressful. It can be especially challenging to pivot from working and living off of your employment income and investing the excess, to retirement and living off of income primarily from retirement and investment accounts. That challenge can evolve into anxiety when navigating a volatile market and an ever-changing economy. The tendency is for individuals to sell out of these investments during challenging times and buy after the market improves, which can significantly, and too often negatively, impact the overall rate of return on their portfolios. Maintaining your long-term money in a diversified portfolio aligned with your risk tolerance throughout is generally the better path.
In fact, the potential upside of keeping some growth in your portfolio is supported by the fact that the S&P’s average annualized return since 1957 through Dec. 31, 2023, is 10.26%‡. Remember, past performance is no indication of the future and there have been and will be ups and downs in the market. Having the guidance and support of a trusted financial advisor can help you stay the course through market cycles.
Creating a Spending Plan
Another critical component of a successful retirement is building a spending plan that can be supported by all sources of retirement income. Not doing this is one of the biggest mistakes we see. In meeting with retirees, I’ve experienced a couple of common reactions. Some are afraid to spend in fear of running out of money, so they only spend on essentials, thus limiting their joy in retirement. Others who may have lived paycheck to paycheck during working years and now have access to substantial funds often overspend.
Balancing expenses, income and your investments during retirement can feel like a financial impossibility. But working with a trusted financial advisor to create a personal financial plan can help remove some of the guesswork and provide the confidence to set you on course for a comfortable retirement.
For 35 years, Huntington Financial Advisors have been providing prompt, personal service to clients like you for moments that matter. We offer meaningful advice and can create a plan that is designed to focus on your key priorities to help achieve your goals. Call Huntington's Advisory Resource Group at 800-530-1690 to learn more or use Advisor Connect to find an advisor who's a good match for your unique position.
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† Social Security Administration. 2023. "Actuarial Life Table." Accessed April 5, 2024. https://www.ssa.gov/oact/STATS/table4c6.html
‡ MAVERICK, J.B. Jan. 3, 2024. "S&P 500 Average Return and Historical Performance." Accessed April 5, 2024. https://www.investopedia.com/ask/answers/042415/what-average-annual-return-sp-500.asp
Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2025.
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