‘Retirement Is Within My Grasp’: A Recession Is on the Horizon and Stocks Are Falling. I’m 57. What, If Anything, Can I Do?
By Steven Orlowski, CFP, CNPR
At 57, retirement is no longer a vague concept—it’s a looming reality. If you've spent decades saving and investing with the hope of retiring in your early 60s, watching the market tumble as recession clouds gather can feel like a punch to the gut. Your 401(k) may be shrinking. Your confidence, too.
But take a breath. This moment—however nerve-racking—is not a dead end. There are smart, strategic steps you can take to protect your nest egg and possibly even strengthen your retirement readiness.
Here’s what to consider:
1. Don’t Panic-Sell
It’s tempting to flee the market when stocks are falling. After all, if retirement is only a few years away, why expose yourself to more losses?
But selling in a downturn locks in those losses. History shows that markets rebound. After the 2008 financial crisis, the S&P 500 regained its value within a few years. Those who stayed invested were rewarded; those who jumped ship often missed the recovery.
If your retirement horizon is 5 to 10 years away, you still have time to ride out short-term volatility. Instead of selling, review your asset allocation.
2. Revisit (and Possibly Rebalance) Your Portfolio
The closer you are to retirement, the more conservative your investments typically should be. But too conservative, and you risk outliving your money due to inflation.
Now’s a good time to revisit your mix of stocks, bonds, and cash equivalents. You might rebalance your portfolio to reduce risk—shifting some equities into short- or intermediate-term bonds, dividend-paying stocks, or other defensive assets.
But don’t dump everything into cash. Even during recessions, some sectors—like utilities, healthcare, and consumer staples—tend to hold up better than others.
3. Boost Your Cash Reserves
If you plan to retire within the next 2–5 years, it's wise to build a cash cushion. Aim for 1–2 years' worth of living expenses in accessible savings or money market accounts. This way, if the market is still down when you retire, you won’t be forced to sell investments at a loss to fund everyday spending.
You might also consider a “bucket strategy”: keep short-term spending needs in cash, intermediate needs in bonds, and long-term needs in stocks.
4. Maximize Retirement Contributions
While you’re still working, take full advantage of retirement account catch-up contributions. In 2025, those 50 and older can contribute an extra $7,500 to their 401(k), for a total of $30,500. IRAs also allow an extra $1,000 for those 50 and up.
If your income allows, consider also contributing to a Roth IRA (or backdoor Roth), especially if you expect your tax rate to be higher in retirement. Roths offer tax-free withdrawals and no required minimum distributions.
5. Delay Retirement—Even Slightly
Working just a few more years can dramatically improve your retirement picture. It gives you more time to save, reduces the number of years you'll draw down your nest egg, and increases your Social Security benefits.
Each year you delay claiming Social Security beyond full retirement age (up to age 70), your benefit increases by 8%. That’s a guaranteed return—hard to beat, especially during market uncertainty.
6. Reevaluate Retirement Spending Expectations
Sometimes the math just doesn’t work—at least not with your original vision of retirement. But small adjustments can go a long way.
Could you downsize your home, relocate to a lower-cost area, or cut discretionary expenses like travel or dining out in early retirement years? Planning for flexibility now helps avoid more painful cuts later.
7. Meet With a Financial Planner
Now is not the time to “wing it.” A Certified Financial Planner™ can help you model different retirement scenarios, test your portfolio’s resilience in a downturn, and build a withdrawal strategy that minimizes taxes and maximizes longevity.
Some planners even specialize in “retirement readiness checkups”—tailored plans for people in your exact situation.
The Bottom Line
Recessions are scary—especially when they hit right as you’re eyeing the finish line. But being 57 doesn’t mean it’s too late to adapt. You’re old enough to benefit from decades of compounding, yet still young enough to make meaningful adjustments.
So breathe. The path may be bumpier than expected, but retirement is still within your grasp.
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