Many people think retirement success comes down to one question: Have I saved enough?

It’s an important question. It’s not the only one.

Two people with nearly identical savings, spending habits, and investment returns can experience very different retirements.

One enjoys decades of financial security.

The other faces difficult decisions much sooner.

But how can two retirement plans that look so similar end up so far apart?

The answer begins with something referred to as the Retirement Red Zone.

At first glance, it doesn’t seem to make sense. If two people earn similar savings and investment returns, shouldn’t they end up in roughly the same place?

Not necessarily.

When withdrawals are involved, losses early in retirement can have a greater effect than losses that arrive later. Selling investments after a decline leaves fewer shares available to participate if the market recovers.¹

Same savings. Same average return. Different outcomes.

Financial professionals sometimes refer to the five years before and after retirement as the fragile decade.²

You can also think of it as the Retirement Red Zone.

Just like in football, the red zone is where the biggest plays happen. The years surrounding retirement can have an outsized impact on what comes next.

Before retirement, you’re still building your savings. After retirement, you begin relying on them.

A market downturn during that transition can make the shift more challenging.

History offers real-world examples of how timing can shape retirement.

Someone who retired in 1995 enjoyed several years of strong market growth before the dot-com crash.

Someone who retired in 2000 faced major market declines almost immediately.

Even with similar savings, the second retiree likely faced more difficult decisions about spending and withdrawals.*

*Hypothetical example for illustrative purposes only. Actual results depend on investment returns, withdrawals, fees, inflation, and other factors.

But you have more control than you might think.

Keeping cash reserves for near-term spending can help reduce the need to sell investments after a downturn.

Flexible withdrawals, a thoughtfully balanced investment mix, and dependable income sources can also help your retirement plan weather market volatility.

Already retired? These same levers may still give your strategy more room to respond.

The Retirement Red Zone may be one of the most important stretches of your financial journey. While you can’t control what the market does during those years, you can prepare your retirement plan for a range of possibilities.

If you’d like to pressure-test your retirement plan, let’s talk. Together, we can explore different scenarios and discuss strategies that may help you stay confident, no matter what the market brings.

Risk Disclosure: Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance does not guarantee future results.

This material is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. The content is developed from sources believed to be providing accurate information; no warranty, expressed or implied, is made regarding accuracy, adequacy, completeness, legality, reliability, or usefulness of any information. Consult your financial professional before making any investment decision. For illustrative use only.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific situation with a qualified tax professional.

Advisory services offered through NewEdge Advisors, LLC, a registered investment advisor.

Sources

1. Morningstar, 2025 [URL: https://www.morningstar.com/retirement/how-avoid-outliving-your-retirement-savings-its-all-sequence]
2. Kiplinger, 2024 [URL: https://www.kiplinger.com/retirement/in-retirement-planning-consider-the-entire-journey]