Investing in Retirement:
​Why It's Different and Why Losses Matter More
When you're working and saving for retirement, investing is all about growth. You contribute regularly, ride out market ups and downs, and focus on long-term gains. But once you retire and start drawing from your investments, everything changes.

The Shift:  Accumulation vs. Distribution

During your working years, you're in the accumulation phase—building wealth and taking advantage of market dips by buying low. But in retirement, you're in the distribution phase, where you need to withdraw money from your investments to cover living expenses. This shift makes a huge difference in how market losses impact you.

​The Danger of Large Losses in Retirement

When you’re no longer contributing and instead withdrawing from your portfolio, large market downturns can be devastating.
Here’s why:
  1. Sequence of Returns Risk – If the market drops early in your retirement and you’re taking withdrawals, you are locking in losses. This means you have less money left to recover when the market eventually rebounds.
  2. Compounding in Reverse – When you were working, compound growth worked in your favor. In retirement, withdrawing from a shrinking portfolio compounds losses instead of gains.
  3. Longevity Risk – Retirement could last 20-30 years. A big loss early on increases the chances of running out of money later in life.

​A Real-World Example

Imagine two retirees with identical $1 million portfolios. Both withdraw $40,000 per year. One starts retirement in a strong market, and their portfolio grows despite withdrawals. The other retires into a bear market, suffering a 30% loss early on. Even if the market eventually recovers, the second retiree’s withdrawals have locked in losses, and their portfolio may never fully rebound.

The Solution: A Smarter Retirement Investment Strategy

In retirement, protecting what you’ve built is just as important as growth. A well-structured retirement portfolio balances:
  • Growth potential for long-term security
  • Income generation to support your lifestyle
  • Risk management to reduce exposure to severe downturns

Retirement investing is not just about chasing returns—it’s about ensuring your money lasts as long as you do. Avoiding large losses early in retirement can be the key to financial security for life.


 800-571-6447

All written content on this site is for information purposes only. Opinions expressed herein are solely those of Campbell Financial Advisory, LLC and our editorial staff. Material presented is believed to be from reliable sources; however, we make no representations as to its accuracy or completeness. All information and ideas should be discussed in detail with your individual adviser prior to implementation. Fee-based financial planning and investment advisory services are offered by Campbell Financial Advisory, LLC, a Registered Investment Advisor in the State of Arkansas. Insurance products and services are offered through Campbell Insurance Services, LLC. Arkansas Insurance Producer Number #1667080. Campbell Financial Advisory, LLC and Campbell Insurance Services, LLC are affiliated companies. The presence of this web site shall in no way be construed or interpreted as a solicitation to sell or offer to sell investment advisory services to any residents of any State other than the State of Arkansas or where otherwise legally permitted. Campbell Financial Advisory, LLC/Campbell Insurance Services, LLC and Aaron Campbell are not affiliated with or endorsed by the Social Security Administration or any other government agency.