A couple retires with $1.5 million tucked away, shuts down the alarm clock for good, and starts planning the good stuff: travel, hobbies, lazy mornings and absolutely no more meetings that could have been emails. Then the stock market drops 25%. Suddenly, that $1.5 million looks a lot less comforting on a brokerage statement, and the question changes from “Can they afford retirement?” to “What happens if this keeps going?”
The answer depends on much more than the size of the market decline. A 25% drop does not automatically turn a well-funded retirement into a financial disaster, but selling investments at the wrong time while continuing to withdraw money can create a serious problem called sequence-of-returns risk. The good news? A market crash does not require a retiree to panic, raid every account or start clipping coupons for oxygen.
