While retirement planning is a decadeslong endeavor, the way you handle your final decade before leaving the workforce will have a critical impact on how ready you’ll be when that day finally arrives.
“It hits about 10 years out—this train is coming to me,” says Danielle Byrd Thompson, a financial professional at Equitable Advisors in Washington, D.C. “It’s like a time clock is starting.”

Of course, that final stretch is far easier to navigate when the stock market cooperates. From 2009 through 2021, the bull market was a wind at preretirees’ backs, with the S&P 500 index delivering 16% annualized total returns. Last year, though, the weather changed: U.S. stocks fell nearly 20%, and U.S. bonds, as tracked by the iShares Core U.S. Aggregate Bond exchange-traded fund (ticker: AGG), dropped 13%.

This year hasn’t been any easier to navigate, especially recently, as banking-sector chaos has whipsawed stocks and intensified fears of a recession.
While the near-term outlook may be unsettled, the forecast brightens when you look further out. BlackRock predicts that over the next 10 years, a classic global portfolio of 60% stocks and 40% bonds will return an annualized 7.6%; J.P. Morgan Asset Management foresees 7.2% for the same.
Of course, you can’t actually predict the future of the market, so your preretirement checklist should focus elsewhere: your asset allocation, savings rate, and contingency planning. “Relying on the market to do one’s retirement planning for you is overreliance on something you can’t control,” says K. Esther Szabo, a Certified Financial Planner and the CEO of Gates Pass Advisors in Los Altos, California.

Fine-Tuning Asset Allocation

When the market is underperforming, it may be tempting to try to juice your returns. But the run-up to retirement isn’t the time to take on more risk in your portfolio, experts caution. Instead, focus on transitioning from building wealth to preserving wealth, says Maddi Dessner, head of global asset-class services at Capital Group. That means an increased focus on higher-quality investments with a narrower range of outcomes and less volatility, she says. For example, consider rotating out of high-growth stocks into income-oriented equities, and, on the bond side, be wary of high-yield, aka junk, bonds.

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