How to Help Recession-Proof Your Retirement Savings

Originally published: May 18, 2022

Updated: July 2, 2026

After the market volatility many investors have experienced in recent years, it’s natural to wonder if you’re doing as much as you can to protect your retirement nest egg from stock market volatility.



Even when the market falls during economic turbulence, you have more power than you realize. You just need to ‘Take Action’ — which is frankly the opposite of ‘Stay the Course.’ Most people reach a point in their lives when the course no longer makes sense. These five steps can help keep you on track during uncertain economic times.

1. Transition Some Savings Out of the Market

Investing in the stock market always comes with a measure of risk. In exchange, over time you’re typically rewarded with higher returns than those you’d get from savings accounts, CDs, and other comparable accounts. But sometimes the market dips and your portfolio takes a hit.

The question many people have is: ‘Should I get out when the market begins to decline?’ Not always and not everyone — but for a more mature investor, yes. It is a very good move to make at least some of your money safe before and especially during a market decline.

If you are over-invested and carrying too much risk for your age, you might not have enough time to recover from a major market decline before you need to use your savings.

For example, what would happen if a recession depleted a big chunk of your savings and then it took 4–5 years to recover, as it did during The Great Recession of 2008?

The Great Recession stands as a cautionary tale about risk and the dangers of ‘staying the course.’ The culprits behind that collapse included the subprime mortgage market, swift interest rate increases by the Federal Reserve, a credit crunch, risky Wall Street behavior, and toxic securities that caused investment values to nosedive.



Market risks like these can re-emerge at any time. A solid financial plan during market decline includes true diversification — having some savings in a place where you absolutely cannot lose it no matter how far the market falls.

2. MAKE SURE YOU’RE REBALANCING

Throughout your life, you’ll want a mix of riskier assets for growth and safer assets for stability. The closer you get to retirement, the less risky you usually want to be — and completely eliminating risk from at least some of your portfolio is critical for today’s retirees.

A good rule of thumb used throughout the financial industry is The Rule of 100: take 100 and subtract your age. Whatever is leftover is the percentage of your portfolio that could reasonably be at risk. For a 60-year-old, that means no more than 40% of assets in stocks, bonds, mutual funds, or other securities.



In addition to setting your mix of risky and safe assets, you should rebalance your at-risk investments regularly. A long run of stock market returns can actually leave you taking more risk than you should if it isn’t managed regularly.

3. GUARANTEE SOME PART OF YOUR RETIREMENT INCOME

Utilizing guaranteed income sources that are not impacted by market volatility — like a lifetime income annuity — can be a smart way to ride out a recession without serious losses. With this strategy, you will have a paycheck you can count on each and every month, for the rest of your life, regardless of market conditions.



Pensions and Social Security are also examples of stable sources of retirement income. If you’re on the verge of retirement, consider keeping enough cash in a risk-free location — like a savings account — to cover a couple of years’ worth of expenses. Cash value in permanent life insurance, like an Indexed Universal Life (IUL) policy, can be another tool to fund a cash reserve. In a low-performing market, you’ll be able to tap that cash supply instead of selling investments at a loss — and it grows tax-free.

4. DIVERSIFY, DIVERSIFY, DIVERSIFY

Without ‘True Diversification,’ the market risk to your portfolio is going to be way too high — especially for a retiree. The goal is to keep your portfolio healthy regardless of what the market is doing.

True Diversification involves placing a portion of your money in a place where you absolutely cannot lose it during times of poor performance, but where it will still grow at a reasonable rate of return during times the market is doing well.

A good tool for achieving True Diversification is a Fixed Index Annuity (FIA). These accounts grow based on certain indexes within the stock market — so you can experience the upswing of a positive market. But they also lock in to protect your money during market decline so you won’t lose money along the way. It’s a safe vehicle for your savings to accumulate at a reasonable rate of return over time with no risk.



It is important to work with a Fixed Index Annuity specialist — not an investment advisor — when adding this product to your portfolio. This helps ensure you receive the right information and that your annuity is structured correctly to meet your needs.

5. WORK WITH AN EXPERT, OR TWO!

Facing an uncertain market — especially as you close in on retirement — comes with high stakes.

A great financial advisor who specializes in securities and investments will understand your financial goals and guide you to options that help build your savings over time. But if making more of your portfolio safe makes sense for your phase of life, a securities and investment advisor won’t be as effective — they specialize in balancing risk as you grow your nest egg.

Especially if you are a more mature investor, you may need a different kind of expert: a Safe Money Expert. This is someone who specializes in helping more mature clients transition from at-risk strategies to strategies that protect the savings you’ve already established and help you utilize them to meet your future income needs.

A strong financial plan must include True Diversification to properly prepare for the ups and downs of the market. That is how you safely weather a recession so that you can focus on what’s important: enjoying your retirement.



At Summerlin Benefits Consulting, we are Safe Money Experts. We specialize in Fixed Index Annuities and other strategies to help more mature investors protect their assets. Call Today — now is the time to Take Action.

Note: This content is for informational purposes only and does not constitute tax or legal advice. Summerlin Benefits Consulting does not provide social security, specific advice related to taxes, or legal advice. Consult a tax/legal professional for guidance with your individual situation.