If you’ve been socking money away in a 401(k) or IRA for years, the last thing you want just before you venture into retirement is a stock market downturn. Underperformance in the market just as you start withdrawing money from your nest egg can ding your savings significantly—something your portfolio could struggle to recover from. Poor returns along with taking distributions early on in your retirement can drain an account balance too quickly: “Portfolio withdrawals compound losses,” says BlackRock analysts. But an article in Kiplinger offers advice on how to make the most of the current market and not tarnish your savings for your golden years.

It’s an unlucky turn of fate to see a market downturn just as you’re about to sell, “akin to a roadblock set up on the on-ramp to a comfortable retirement,” the article contends. This pitfall is known as “sequence-of-returns risk” on Wall Street and “can make a difference between having enough money to last throughout your life span or running out of money or cutting back on the lifestyle you planned for,” says Amy Arnott, a portfolio strategist at Morningstar interviewed in the article.  

One step you can take to mitigate risk is to avoid having 100% of your investments in stocks. Instead, make sure you’ve allocated a healthy amount to lower-volatility fixed-income assets, like bonds and cash. This will give your portfolio more stability to weather any volatility that comes your way. Additionally, advises Arnott, put aside a bucket of cash that’s equal to at least a year or two of living expenses, so you won’t have to sell off shares should you run into trouble. Those shares, in return, can be then be sold when the market swings back up again so you don’t miss out on the rebound. And, the longer you can hold out the better; market declines in your 70s and 80s won’t be as damaging because your portfolio has had years of growth from the compounding of returns, and you’ll have fewer years of retirement left, the article maintains.

Meanwhile, experts at T. Rowe Price advise not to be too conservative in the run-up to retirement. A growth-oriented, heavy-on-stocks approach could garner big returns and give you a softer cushion should the market decline in early retirement. Also, reducing the amount of your distributions could help protect you should you find yourself on the wrong side of a market return sequence. For example, if you planned to withdraw 4% a year, reduce that to 3% or even 2% during a down market. Or, don’t increase your withdrawal amount to accommodate for inflation. You could even skip withdrawals completely should you get into a jam, and slash unnecessary expenses from your budget, says Rob Williams, of Schwab Center for Financial Research, who is quoted in the article.