In my years working as a financial planner, one common belief I’ve noticed among many people is that once you retire, your money will only shrink. The worry about how the stock market behaves can be quite nerve-wracking, and the fear of losing money is very real. However, I’m here to dispel this myth and share a bit of good news: your retirement savings don’t necessarily have to dwindle, they can grow too!

First, let’s address the notion of changing the way you invest when you retire.

Many folks believe that once they stop working, they need to take their money out of the stock market and keep it somewhere less volatile, to potentially avoid any significant losses. This is somewhat true – when you retire, it may be a good idea to consider reducing the risks in your investment strategy. But this doesn’t mean taking your money out of the market entirely.

In fact, during the initial part of your retirement, your money can potentially continue to grow. This might sound surprising, but think about it: retirement is not an end-point, but rather a new phase of life, often lasting several decades. During this time, your investments can continue to generate returns, adding to your retirement savings instead of just draining them.

So why do so many of us believe the myth that retirement means our savings can only shrink? Many people think that once they stop working, they no longer have the luxury of time for long-term investing. But let’s take a moment to consider what ‘long-term’ really means. If you retire at 65, which is common for many folks, and you live until you’re 95 (which is increasingly common too), that’s a full 30 years of retirement. In my book, 30 years definitely qualifies as long-term!

This fear of negative fluctuations in investments during retirement is quite understandable. It’s scary to think that your hard-earned nest egg might take a hit just when you need it most. But with a smart strategy, your investments may be able to bring you a higher return over the long run. This is the beauty of a well-planned retirement strategy – your money might decrease some years, but other years, it can potentially increase more than what you’re withdrawing.

It’s also important to note that the term ‘long-term’ isn’t restricted to your own lifetime. Say, for example, that you’re 80 and you’re planning to leave some money for your kids or grandkids. In this case, that money will keep working for them even after you’re gone. So, in a way, the concept of ‘long-term’ never really goes away. It’s a valuable insight that we believe everyone should keep in mind as we plan for our futures.

Let’s also briefly touch on inflation. Simply put, it’s the way things usually get more expensive over time. If you don’t keep some of your money invested in things like stocks, it could be hard to keep up with these rising costs. So, being overly cautious and keeping all your money in what are commonly considered low-risk places (like under your bed), might not be the best strategy. Your money needs to be working for you, not just sitting around.

So, I want to re-emphasize the main takeaway here: Your retirement savings don’t just have to shrink, they can keep growing. With a smart, careful plan, your money can continue to work for you, helping to ensure you have a comfortable life throughout your golden years. Don’t let the myth of shrinking retirement savings cloud your judgment. Instead, remember that with the right planning, reality could be much brighter. Retirement is not the end of your financial journey, but a new chapter where your money can continue to grow!

The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Peter Gutekunst and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected.

Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.