ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Direct Indexing
    • Disruptive Technology
    • Energy Infrastructure
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Financial Literacy
    • Fixed Income
    • Gold/Silver/Critical Minerals
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Modern Alpha
    • Multifactor
    • Night Effect
    • Portfolio Strategies
    • Responsible Investing
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
  • Research
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF of the Week Podcast
    • ETF Prime Podcast
    • Video
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Retirement Income Channel
  2. Sustaining Your Retirement Portfolio in a Bear Market
Retirement Income Channel
Share

Sustaining Your Retirement Portfolio in a Bear Market

James ComtoisJul 21, 2022
2022-07-21

The market downturn has put many investors saving for retirement on edge, wondering if they should change their investment strategy — and if so, how. But Christine Benz, Morningstar’s director of personal finance and retirement planning has some advice for investors nervous about bear markets, no matter what stage of the game they’re in.

For investors under 50 still in the accumulation phase of saving for retirement, Benz said in a video interview conducted by Morningstar’s director of content Susan Dziubinski that the contribution rate “is going to be the main determinant of your plan’s success or failure.” Fortunately, the same contribution rate in a down market lets investors purchase more shares than they could have in a bull market.

Investors in the early stage of saving for retirement should also “check [their] asset allocation and make sure [they] have a plan for rebalancing back to that target asset allocation.” Benz recommends a target-date fund to keep a portfolio’s asset allocation on track on an ongoing basis since rebalancing is built into such a fund.

“If you’re not using an all-in-one product like that, just make sure that you have a system for rebalancing,” Benz said. “And rebalancing basically means that you’re stepping up your exposure to the asset classes that have dropped. For most portfolios, stocks have dropped the most, recently.”

Older investors who are closer to retirement should also consider raising their contribution rates since those additional contributions can still compound and make a difference in their plans.

“At this life stage, if you’re in your 50s or early 60s with retirement on the horizon, you generally want to be looking for balance in your retirement portfolio,” Benz said. “So, you absolutely need stocks for long-term growth, but you also need some safer investments in your portfolio. So, you want high-quality short and intermediate-term bonds.”

She added that it’s not “too early to start building up some cash reserves.”

Retirees who are already drawing from their portfolios will want to focus on what they can control. One thing they can control is their withdrawal rates. They should also look at their asset allocation and think about where they’re going for those withdrawals.

“I like the idea of retirees holding some cash, some high-quality short-term bonds on an ongoing basis to help meet those income needs on an ongoing basis,” Benz said. “I think that that’s the linchpin of a Bucket-type strategy. That’s a good starting point when thinking about how to structure your in-retirement portfolio.”

Also in a bear market, options-based ETFs could be something for investors at any stage of their retirement savings journey to consider. Option-based ETFs are geared to either protecting investors from losses in a down market or providing supplemental income to another investment strategy.

Nationwide offers a suite of actively managed ETFs within equities for financial advisors. These funds include the Nationwide Nasdaq-100 Risk-Managed Income ETF (NUSI), the Nationwide S&P 500 Risk-Managed Income ETF (NSPI), the Nationwide Dow Jones Risk-Managed Income ETF (NDJI), and the Nationwide Russell 2000 Risk-Managed Income ETF (NTKI).

For more news, information, and strategy, visit the Retirement Income Channel.

Loading Articles...
Our Sites
  • VettaFi
  • Advisor Perspectives
  • ETF Trends
Tools
  • ETF Screener
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Database Pro
More Tools
  • Financial Advisor & RIA Center
Explore ETFs
  • ETF News
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Information
  • Contact Us
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X