Safe Money Strategies

The investment advice you received in your 40s — diversify, stay the course, ride out market downturns — doesn’t apply equally to all of your retirement assets. When you were 45, a 30% market drop was an opportunity. When you’re 68 and drawing down your savings to cover expenses, a 30% drop can permanently alter your retirement.

Safe money strategies acknowledge this shift. As you approach and enter retirement, a portion of your assets needs to be protected from loss — not because growth doesn’t matter, but because sequence-of-returns risk is real and it disproportionately punishes retirees who sell assets during downturns.

The Sequence-of-Returns Problem

Here’s a concrete example: two retirees each start retirement with $500,000 and earn the exact same average annual return over 20 years. The only difference is the order of good and bad years. The one who experienced losses in the early years and gains later ends up with dramatically less money — because they were forced to sell shares at a loss to cover expenses before the portfolio recovered. Safe money protects against exactly this scenario.

Tools That Work

Fixed annuities and MYGAs offer principal protection and guaranteed rates. High-quality short-to-medium-duration bonds reduce volatility. Certificates of deposit provide FDIC protection for money you’ll need in the near term. Cash and money market funds cover immediate liquidity needs.

The right mix depends on your withdrawal timeline, your risk tolerance, and how much of your essential expenses are already covered by guaranteed income sources like Social Security.