Markets reset. They always have. The real question is whether the next one finds you prepared—or finds you asking what you should have done while there was still time to do it.
Investors approaching retirement or already taking portfolio withdrawals.
A plan built around average returns rather than the order in which gains and losses occur.
Before markets fall, while choices remain deliberate instead of forced.
Life is a long series of “what if” moments. What if I had taken that job? What if we had bought the house? What if I had seen it coming? Most of those questions arrive without warning—there was nothing you could have done. But a market reset is different. It is one of the few “what ifs” you can see forming on the horizon, and one of the few you can actually prepare for before it lands.
That distinction matters more as you approach retirement. When you are young, a downturn is an inconvenience and a buying opportunity—time repairs the damage. When you are at or near retirement, the same downturn can permanently reshape the life your savings were supposed to support. Same market. Entirely different consequence.
Preparing before the reset is not about predicting the exact day it arrives. No one can do that reliably, and anyone who claims otherwise should be treated with suspicion. Preparation is about making sure that when the reset does arrive, its timing cannot quietly undo decades of work. That is a decision made in calm markets—not in falling ones.
The figures below are not forecasts. They are reminders that large declines have happened before—and that retirement withdrawals can make the timing of those declines far more consequential.
Approximate peak-to-trough decline in the S&P 500 during the 2007–2009 financial crisis.
Approximate S&P 500 decline from 2000 through 2002. Recovery took years rather than months.
The early years of retirement are often when a major decline can do the most lasting damage.
Historical index declines are illustrative and approximate. Past performance does not guarantee future results.
Each question is easier to address today, while choices remain open. Each becomes harder to answer after a reset is already underway.
The first few years of withdrawals matter most. A steep decline at the start—while drawing income from a shrinking balance—can leave less capital available to participate in the recovery. This is sequence-of-returns risk, and it is unforgiving about timing.
A lifetime at one company often produces a portfolio quietly built around its stock. Concentration can feel like loyalty until the cycle turns. Your retirement income should not depend on one company’s worst year.
A plan built for the last decade’s rising market may carry more risk than it did when it was created. The key question is not merely whether you can tolerate a paper loss, but whether your income plan can survive it without forcing decisions you would never choose freely.
Two retirees can withdraw the same income from identical starting balances and earn the same average return over time. The difference is when the bad years arrive. This illustration shows why the order of returns—not just the average—can influence whether the money lasts.
Hypothetical illustration for educational purposes only. It is not a projection, recommendation, or guarantee of any outcome. Actual results will vary.
If you are approaching retirement—or already there—and want a second opinion from an advisor who has guided clients through multiple market cycles, begin with the Portfolio Preparedness Review. No obligation. Just perspective, while there is still time to use it.
Bailey Financial Services, Inc.
Watkinsville, Georgia
Bailey Financial Services, Inc. is a state-registered investment adviser. This page is for informational and educational purposes only and should not be construed as investment, tax, or legal advice or as a recommendation to buy or sell any security. Past performance does not guarantee future results. © 2026 Bailey Financial Services, Inc. All rights reserved.