The Problem With Buy-And-Hold During Retirement
The Hidden Cost of Waiting It Out
By Jared Prazen | Secure Retirement Planners
In earlier videos, we talked about protecting your income from the ups and downs of the market. This one is about the rest of your money: the part that's still invested for growth, and what happens to it in the next downturn.
For most portfolios, the plan is simpler, and riskier, than people realize.
Retirement money has two jobs
The first job is paying the bills. We believe essential expenses should be covered by income that doesn't depend on the market, like Social Security, pensions and contractual lifetime income. The second job is growth. That money stays invested, so it still needs a plan for the next downturn. Most portfolios have a plan for growth; far fewer have a plan for the downturn.
What's the plan for the next downturn?
For a buy-and-hold portfolio, the honest answer is the same every time: stay invested and wait for the recovery. Here's why that matters more once you're retired.
Every loss takes a bigger gain to undo. A 30% decline needs a 43% gain to get back to even. A 50% decline needs 100%.
Recovery time is the real risk. Measured in buying power, with dividends reinvested, the 2020 crash recovered in about 0.6 years and the 2022 decline in about 2.3 years. But after the 1973 oil shock it took about 12 years, and an investor at the 2000 peak didn't break even until 2013.
Withdrawals make the hole deeper. On a $1,000,000 portfolio that falls 30%, someone who isn't withdrawing needs a 43% gain to recover. A retiree who takes out $50,000 that year needs 54%, and next year's withdrawal comes out before the recovery does.
The market has always come back eventually. The real question is whether you have 12 years to wait while you're drawing money from it.
Questions worth asking about your own portfolio
If the market falls:
What happens in my account in a 30% decline?
Who makes that call, and based on what?
Is there an actual plan, or is the plan to wait?
Would I end up making decisions in a moment of panic?
While it recovers:
Where do my withdrawals come from?
Am I selling investments while they're down?
How long could I keep withdrawing before it changes how I live?
How would it affect my spouse?
Not every portfolio has to be managed the same way. But you should know exactly how yours is managed, before the next downturn, not during it.
A question worth answering
If the market fell 30% next year, do you know what would actually happen in your account? If you're not sure, that's exactly the conversation we have with every family we work with.
Keep watching: Examining the "bucket strategy" approach to retirement planning:
About the author:
Jared Prazen is a financial advisor with Secure Retirement Planners, focused on retirement income planning for people approaching or already in retirement. He helps families build plans that cover their essential expenses with predictable income, so the rest of their money can be managed with a clear plan.
Recovery times: StatOasis, "S&P 500 Drawdowns Since 1871" (updated October 2026), from Robert Shiller's monthly S&P Composite data. Gain-needed and withdrawal figures are simple arithmetic, before fees and taxes, for illustration only; they do not represent any actual investment. Indexes are unmanaged and cannot be invested in directly. Past performance does not guarantee future results. No investment strategy can ensure a profit or guarantee against losses. Investment advisory services offered through StrongHold Capital Partners, a Registered Investment Advisor.
© Copyright 2026. Secure Retirement Planners All rights reserved. Privacy Policy. Term of Use.
This material is provided for educational purposes only and does not constitute individualized financial, legal, or tax advice. Investment strategies involve risk, including possible loss of principal. Availability of strategies depends on individual suitability and applicable regulations. Insurance products, if applicable, are issued by properly licensed insurance companies. Guarantees are based on the claims-paying ability of the issuing insurer.