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Fix Your Mix: How to Derisk Your Portfolio Before Retirement

In the run-up to retirement, your asset allocation needs to match your risk tolerance without eliminating potential for growth. Here's how to find the right mix.

By Johnny Rosier, NSSA®, CFF®, FRC published 24 February 2026 in Features

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If you're nearing retirement and feeling rattled by the market's recent ups and downs, here's some advice: When you get up tomorrow morning, take a few deep breaths. Then take a good look at your portfolio and see if your mix of investments matches your current tolerance for risk.

My guess is, if you're like most investors, you're heavier on stocks than you think. And that churning you feel when the market drops is a reminder you may need to make changes.

If your hoped-for retirement age is only about five to 10 years away, it's likely time to transition to an asset allocation that can better protect your hard-earned savings. And if you haven't already, you might want to meet with a financial adviser who can help you fix your mix.

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I know, I know. Stocks have been mostly good to investors in recent years. And it can be hard to let go of that kind of growth — especially if you haven't yet met your savings goals or you're worried inflation could take a toll on your retirement income down the road.

Those are legitimate concerns. Just as we can't predict what the market will do, there's no way to know how long you might live, what your long-term health costs might be, or what taxes or inflation will look like in the future.

But by making some tweaks to your portfolio now, you may be able to reduce your portfolio risk and still meet your goals. Here are steps to consider.

About Adviser Intel

The author of this article is a participant in Kiplinger's Adviser Intel program, a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

Prioritize protection

In your younger years, a big loss in the market can be hard to take. But if you stay invested and keep contributing, you can expect your portfolio to eventually recover.

Once you're near or in retirement, however, you become more vulnerable. If your stocks experience a significant loss, and you must sell more shares to generate the retirement income you need, it can affect how long your savings will last.

This is why it can be a good idea to move a larger portion of your portfolio to more stable, lower-risk investments. If you aren't sure where you stand, your financial adviser can run a stress test to help determine what could happen to your portfolio in certain worst-case scenarios.

Look beyond mutual funds

It's not unusual for investors to have a portfolio made up of two or three mutual funds and nothing else. I see it all the time. Unfortunately, they think this provides them with the diversification they need — and that's not always true.

Often, there's overlap in what these funds are invested in, so an investor could own stock in mostly the same few companies. That's why it's a good idea at any age to consider further diversifying with other investments. That might include real estate, commodities, annuities and/or cash and cash equivalents.

If you like owning stocks, consider investing in some dividend-paying stocks, which can provide passive income in retirement. Again, if you aren't sure what you have in your investment accounts, ask a financial adviser to break it down for you and evaluate your risk.

Don't let your asset allocation wander off track

Investors often choose a portfolio mix that makes sense at the time, then forget to make adjustments when the market fluctuates or when their risk tolerance changes.

Sadly, many find out the hard way — by losing a large chunk of money — that their mix is no longer as moderate or conservative, or as age appropriate, as they thought.

An occasional fine-tuning, or rebalancing, can help ensure your allocation is aligned with your current risk tolerance and goals.

Keep in mind that de-risking your portfolio can get expensive if you have to make big-time moves that trigger taxes, so a mindful, gradual switch to a safer portfolio is usually a better way to go. For most people, it makes sense to start transitioning to a safer portfolio at least five years before retirement.

Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel, our free, twice-weekly newsletter.

Don't play it too safe

Dialing down the risk doesn't mean pulling absolutely everything out of more aggressive growth investments and moving it all to safety.

This isn't your parents' or grandparents' retirement, and putting all your money into CDs, a savings account and Treasury securities likely won't provide the income you need to make it through a long retirement.

It's the mix that matters, and maintaining some funds in the stock market is usually necessary to sustain your lifestyle as you grow older. Your financial adviser can help you determine what that percentage should be.

Market volatility is inevitable, but it doesn't have to dictate what your retirement will look like — and it shouldn't be constant a worry. With careful planning and thoughtful investment management, you can keep your portfolio on track and continue looking forward to a fulfilling retirement future.

Kim Franke-Folstad contributed to this article.

The appearances in Kiplinger were obtained through a PR program. The columnist received assistance from a public relations firm in preparing this piece for submission to Kiplinger.com. Kiplinger was not compensated in any way.

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Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Johnny Rosier, NSSA®, CFF®, FRCSocial Links NavigationFounder and President, Goal Planning Strategies

As founder and president of Goal Planning Strategies, Johnny Rosier is devoted to helping public and private sector employees maximize their retirement benefits. He is a certified National Social Security Advisor (NSSA®) and Federal Retirement Consultant℠ (FRC), and he helped author the FRC certification course. Johnny and his team travel nationally to provide educational seminars on benefits. Inspired by his older sister, Johnny began his financial service career in 1976, and he hasn't looked back.