Should You Delay Retiring in a Down Market?

Stocks are swinging wildly and the Nasdaq is in a bear market. But take a close look at your savings and spending before making a decision

Donna Fuscaldo and Daniel Bortz,

Updated April 09, 2025

AARP

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En español

Published October 03, 2022

/ Updated April 09, 2025

a bear and a clock on opposite sides of a seesaw

AARp (Getty Images 2)

After President Donald Trump announced a globe-spanning tariff agenda on April 2, the U.S. stock market lost a record-breaking $6.6 trillion over a two-day stretch. The sharp sell-off sent the Nasdaq Composite into a bear market, marking a 20 percent decline from the index's peak, and investors fear the Dow Jones Industrial Average and the S&P 500 could be next.

If a down market persists, it could put a wrench in many people’s retirement plans.

That’s particularly true of those gearing up to retire soon. Instead of planning their exit, many are concerned about declines in their portfolios and wondering whether now is still the right time to leave the workforce.

“If the primary worry is withdrawing from your savings when the market is in a tailspin, this is the time to be both proactive and defensive,” says Pam Krueger, founder of Wealthramp, a nationwide network of fee-only financial advisors. “That means assessing where you are today and stress-testing your withdrawal strategy in a down market with a fiduciary advisor.”

“Don’t make any big decisions,” she adds, “until you know exactly where you stand.”

It’s easy to get caught up in the moment, but don't jump to a conclusion. Take a step back and ask yourself the following questions to determine whether or not you should delay your retirement.

Do the numbers still add up?

Take your investment portfolio, for starters. If you’ve been saving for years, one down market isn’t a reason to reset everything. But it is time to reevaluate and reassess where you are, says Keri Dogan, head of investment strategies at Fidelity Investments. “The closer you are to retirement, the more time you want to spend looking at different scenarios,” says Dogan. “Paying attention is good as long as you are responding in a rational way.”

When markets are down is a good time to do a checkup of your portfolio to ensure your investments are in line with your time horizon, risk tolerance and goals. If your portfolio has drifted away from the split you want between stocks and bonds, you can set it back on course. Let’s say you want to have 60 percent in stocks and 40 percent in bonds. If your portfolio has drifted to 80 percent stocks, you can devise a plan to rebalance it by selling stocks and reinvesting in bonds to return to your 60/40 mix. You can either do that on your own or by working with a financial adviser. Online investment firms typically offer rebalancing services as well.

Do you feel good?

Once you’ve got your portfolio in line, you can determine if retirement is still in the cards for this year, next year or even further out. That’s where testing different scenarios comes in. You’re trying to figure out if you can maintain the retirement lifestyle you planned with less cash and higher prices. Experts say to ask yourself a series of questions or work with a financial planner who can help. These questions include the following:

What do short-term losses mean for your spending?
Does it require any sacrifices, and are they too much to bear?
Can you still live comfortably on a smaller investment portfolio?
If you're carrying debt, can you pay it down before you retire? Will it negatively impact your cash flow when you do stop working?

All of these questions need to be answered as part of your retirement readiness assessment.

Can you benefit from delaying retirement?

When it comes to making your final decision, be flexible and open-minded. You don’t want to be married to a timeline that may no longer be realistic. Try to see the positive, even if it means delaying your retirement. Putting off retirement for just three to six months can mean an additional 1 percent of savings for the next 30 years, researchers at Stanford and George Mason universities found. It also buys you time to pay off debt and rein in some of your spending.

The bottom line: Make an informed decision based on your retirement preparedness at this moment. “Even in a tumultuous market, if you let the facts do the talking, you will be able to commit to a plan and feel comfortable and confident,” Krueger says.

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Donna Fuscaldo is a contributing writer and editor focusing on personal finance and health. She has spent over two decades writing and covering news for several national publications including The Wall Street Journal, Forbes, Investopedia and HerMoney.

Daniel Bortz is a personal finance editor at AARP, where he writes and edits money content for the website, from saving and budgeting to building wealth and money management skills. His work has been published by the New York Times, the Washington Post, Consumer Reports, Entrepreneur, Kiplinger, Newsweek, Money and other national publications.