When it comes to retirement savings, many people find it’s easy to build up a stash of cash. The problem usually comes when it’s time to make withdrawals. That’s why it’s important to have a plan for protecting the savings that have accumulated over the years or decades of intentional investing.


The first step toward protecting your retirement savings is diversification. You’ll want to have different buckets that can insulate you from some of the more intense volatility the stock market can bring. Most people will want to keep a year or two of expenses in cash. This will keep them from selling off stock at the bottom of the market. Keeping some of a nest egg in bonds can help with volatility. You’ll also want to have some investments in stock mutual funds to allow some of your money to continue growing over the long term.

Be Flexible

One of the most popular withdrawal plans is known as the 4% Rule. This basically states that a balanced portfolio of stocks and bonds should last for at least 30 years if the retiree withdraws no more than 4% each year. This is a good rule of thumb, but a sequence of returns risk can make it dangerous. If the market is down in the early years of your retirement, it might be a better idea to take out 2% or 3% and cut expenses. Flexibility is a major key to protecting your retirement savings.

Know Your Risk Tolerance

Some people are fine going with a portfolio that’s made up completely of stocks. This strategy can come with a high level of volatility. If you are relatively risk-averse, you’ll want to keep some of your nest egg in cash and bonds. Depending upon how risk-averse you are, you might want to keep the majority of your nest egg in cash and bonds. You’ll cut down on the growth of your portfolio, but you’ll also cut down on volatility. This could keep you from selling at the bottom of the market and cut your losses.

Protecting your retirement savings will require a relatively conservative strategy. Flexibility with your annual or quarterly withdrawals can help you ensure that you have money available for the long term. Keeping a little bit of cash on hand for down years can also help you avoid selling at the worst possible time and moderate your losses.