Hi, it’s Devin Choules, founder and CEO of Choules Financial, and on this week’s Life of Yes, I want to take a moment to talk about risk in retirement—what it means, why it matters, and why your philosophy around investing needs to shift once you cross that line from working to retired.
Why should you review your portfolio before you retire? Because the outcome you experience in retirement is directly tied to the risks you carry heading into it.
If you’ve got a pen and paper nearby, this is a great time to jot some notes and take away a few important concepts.
Let’s start with the big one: Why de-risking matters.
Retirement completely changes the way you think about risk. When you were working—maybe through the 2001 tech collapse or the 2008 financial crisis—your portfolio might’ve dropped 50%. But you were still getting a paycheck. It was painful, yes, but it didn’t affect your ability to live.
In retirement, though, it’s different. A big drawdown not only hits your account value, it can force you to cut back your lifestyle or even consider going back to work.
Here’s a simple example: If you have $1 million and plan to withdraw 5% per year, that gives you 20 years of income. But if the market drops 50%, suddenly you’re working with $500,000—and now your money only lasts 10 years at the same withdrawal rate.
That’s why de-risking isn’t about fear—it’s about control. It’s about building a proactive plan that ensures your investments support your income.
Because really, once you hit retirement, your portfolio has two jobs:
To fund your lifestyle—the life you’ve worked so hard for.
To support your legacy goals—what you want to leave behind.
Your investments are the fuel for your retirement. They allow you to say yes to what matters: spending time with loved ones, traveling, enjoying your favorite restaurants, living the version of retirement you’ve always dreamed about.
And that’s why having a written retirement income plan brings peace of mind. When you can point to a binder—what we call the Yes Binder—and say, “Here’s where my income comes from, here’s my backup plan, and here’s how I survive a 50% market drop,” that’s real confidence.
Let’s look at the major risks you need to account for:
1. Market Risk
We can’t control market cycles. But we can control how much volatility and downside exposure we take on. That’s where thoughtful portfolio allocation comes into play.
2. Sequence of Returns Risk
If you retired in 2011, you’ve ridden the longest bull market in history. But if you retired in 2000 or 2007, you experienced back-to-back 50% drawdowns. Early losses in retirement can have a compounding negative impact. It’s not just about the average return—it’s about the timing of those returns.
3. Inflation Risk
Many people keep all their money in growth vehicles like stocks, ETFs, and mutual funds—because they’ve always done it that way. And yes, those are great tools for outpacing inflation, but they also carry more volatility.
So we ask: Is that money there for income? For inflation protection? For legacy? Because if it’s not serving one of those purposes, then it’s probably in the wrong bucket.
That’s why we organize retirement portfolios into three categories:
Safety – for short-term needs and peace of mind
Income – to fund your lifestyle
Growth – to combat inflation and support legacy goals
It’s about shifting from aggressive accumulation to purposeful allocation. We’re not saying “don’t grow your money.” We’re saying, “make sure your growth is balanced with security and income stability.”
Now let me be clear: De-risking is not going 100% to cash.
Jumping out of the market because of a headline—trade wars, debt ceiling crises, global pandemics—is not a strategy. That’s reacting emotionally. And studies like those from DALBAR have shown that DIY investors who jump in and out of the market tend to earn 3–4% annually, while those working with an advisor—who helps them stay the course—earn closer to 7–8%.
De-risking is not avoiding risk altogether. It’s managing it on purpose.
It’s not a one-size-fits-all formula. Every person’s plan is different. Do you have a pension? Do you have Social Security? Are you planning to spend heavily in retirement or live more modestly? Is your focus on legacy or lifestyle? Healthcare or travel?
We build tailored plans based on your goals, your risk tolerance, your timeline, and your health.
Maybe you’re 70 and in great shape. You do CrossFit. You hike. You’ve got longevity in your family. We’ll plan for that. Or maybe your health history suggests a shorter retirement—we’ll plan for that, too.
Retirement is not static. Life changes—and so should your plan. That’s why we encourage at least annual reviews, if not semi-annual, to make adjustments based on new circumstances: inheritance, big expenses, family needs, or unexpected events.
And remember, investments are just one part of a complete retirement plan. There are five critical components we want to see working together:
Investments – allocated properly to meet your goals
Income – the engine that funds your retirement
Taxes – are you withdrawing from the right accounts in the right order?
Healthcare – aging is expensive; do you have a plan?
Estate/Legacy – is your trust updated, titled properly, and set to transfer assets efficiently?
At the end of the day, our goal is simple: Help you live more, leave your mark, and never have to make financial decisions from a place of fear.
Thanks for watching this week’s Key to Yes. Be sure to like, subscribe, and turn on notifications so you don’t miss next week’s episode. See you then!
