03 Oct The stock market is volatile. Should we pull back our investments?

Q. I’m 58 and my spouse is 57. We still have our investments 80/20 and we do need it to grow to afford where we want to be for retirement. I know the stock market has done well even with all the crazy political happenings. Should we pull back and go to 60/40 or something like that?
— Investor

A. It’s a great question.

And it’s something lots of people, especially those closer to retirement, are considering.

When figuring out asset allocation, there are a couple of different questions you should ask yourself to see what is best for you, said Matt Rembish, a certified financial planner with OneDigital in Boonton.

The first is: When do you need the money?

“Since this is for your retirement, what retirement date do you have in mind? Generally, the closer you are to retirement, the less risky you want your retirement savings to be,” he said. “You have less time for your portfolio to recover if the market were to perform badly at some point before your retirement.”

In your current allocation, 20% of your holdings are in conservative investments, which shouldn’t react as strongly as stocks do, he said.

Rembish said to consider a 2008 sort of market loss.

“Look at how many years until your retirement date. Then look at what you would need to pull from savings in retirement,” he said. “How many years of income would the conservative part of your portfolio give you in retirement? This should give you an idea of how long your stocks have to recover from market losses.”

Next is to consider your risk tolerance.

Back in April, when the stock market was extremely volatile, and your portfolio saw significant losses, how did you react? If you were extremely concerned, maybe the 80/20 mix isn’t best for you. If you were able to stay the course, then you might be in the right mix, he said.

Another factor to consider is your financial goals.

“You mentioned you need the savings to grow to afford your retirement lifestyle. Would you prefer lower returns and less volatility of a 60/40 portfolio, or are you willing to accept potential volatility for higher potential gains in a 80/20 portfolio,” he said.

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This story was originally published in September 2025.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.