Market volatility has increased with the ongoing conflict in Iran, causing investors to wade through short-term swings. For those nearing retirement, the portfolio shocks may be a big source of stress.

“It’s one thing to face a potential war with Iran at the start of your professional life, when you have plenty of time before retirement, and quite another when you are close to retirement and a market downturn impacts your investment portfolio or retirement plan balance,” says certified financial planner Alonso Rodriguez Segarra at Advise Financial.

For many, this may be a good reason to get on the phone with a financial adviser (you can use this free tool to get matched with a fiduciary adviser from our ad partner SmartAsset, as well as sites like CFP Board and NAPFA). And for everyone, the first thing to note during volatility is: don’t panic.

“Geopolitical events can create real short-term volatility in a retirement portfolio, but they rarely change the long-term trajectory of markets in the U.S.,” says Jamie Hopkins, CEO of Bryn Mawr Trust Advisors. “History shows that even during wars or global crises, markets tend to recover and move higher over time. In fact, data shows the market has been up a median of about 5% six months after major geopolitical shocks since WWI, which reinforces how resilient equities can be.”

That said, while the 1990s brought Iraq’s invasion of Kuqait and more recent years saw markets plummet during the pandemic, recovery time for events like these vary. “Markets driven by geopolitical shocks, like the current tensions with Iran, can reverse quickly or they can evolve into something more prolonged like a recession or stagflation. The challenge is that you don’t know which scenario you’re in while it’s happening,” says certified financial planner Mark Struthers at Sona Wealth Advisors.

Here are seven things near-retirees should do to ensure a smoother retirement:

Don’t make overly emotional decisions

For investors, Hopkins says the bigger risk isn’t the event itself, it’s making emotional decisions that pull them out of the market at exactly the wrong time. A July 2025 report from the Wells Fargo Investment Institute reveals the perils of trying to time volatile markets, showing the best and worst days often occur close together and being invested for a full market cycle is more beneficial than trying to time the market.

“Market volatility should serve as a retirement savers gut check. If you are upset by the recent volatility in your portfolio, it might be time to derisk a bit into more fixed income, especially if you are early in retirement or about to retire,” says Hopkins. That doesn’t mean you’ll need to rework your entire portfolio, but it may be helpful to implement more stable income-generating investments and diversify further across asset classes.

Implement a bucket strategy

With an impending retirement amid volatile geopolitical conflicts, Segarra recommends implementing a bucket strategy. “Under this approach, you should hold the equivalent of two years’ worth of expenses in low-risk instruments, using a combination of high-yield savings accounts, money market funds and CDs. This bucket serves to protect you in the event of a market downturn,” says Segarra.

The other bucket can be invested in a diversified mix of stocks and bonds, in accordance with your specific risk profile. “Your investment portfolio does not necessarily have to change simply because you are retiring, rather, it should depend on your overall financial situation, specifically whether you carry any debt, your personal risk tolerance, the amount you anticipate needing for monthly expenses and the rate at which you will need to withdraw funds from your investment portfolios or retirement plans,” says Segarra.

Assess your risk exposure

Considering the Iran war-induced market volatility, it may be a sign to take a deeper look at your risk exposure. “As you close in on retirement, most people begin to have more clarity around what their retirement lifestyle will look like and can plan with a greater degree of precision once they know what they want to do in retirement,” says certified financial planner Joe Favorito at Landmark Wealth Management.

“Most people in their 30s, 40s and even 50s don’t really know when and where they are going to retire with any degree of certainty. When you’re many years from retirement, there are still a number of financial planning issues that need to be addressed. From a risk profile perspective, the goal around retirement accounts is pretty universal; maximize savings and maintain a growth-oriented allocation when you’re more than 10 years from retirement,” says Favorito.

Anticipate your income needs

“What a near retiree does not want to do is retire into a down market with no income plan. If they do experience what we call a negative sequence of returns in the early years of retirement where they are selling investments at a reduced value to generate income, this can be devastating to a portfolio long term. Anyone within three years of retirement, war or not, should anticipate their income needs and set them aside in cash and bonds. We suggest five years of income needs in cash and the balance in bonds. This is called our clients’ war chest,” says certified financial planner Sally J. Boyle at SJ Boyle Wealth Planning.

Focus on flexibility

“For clients who didn’t reduce risk ahead of time, or who are retiring unexpectedly — something we’re seeing more of lately, including with AI-driven workforce changes — we focus on flexibility. In many cases, plans can absorb a downturn. But if risk needs to be reduced, we typically do it gradually. That approach is not only more practical, it’s more manageable psychologically. People struggle when they feel like they’re making an all-or-nothing decision at the wrong moment,” says Struthers.

Stick with a thoughtful plan

“Rather than react emotionally to headlines, stick with a thoughtful financial plan. If you’re drawing income from a portfolio that is still invested too aggressively, a market decline can force you to sell stocks at the wrong time,” says certified financial planner Ryan Haiss at Flynn Zito Capital Management.

“Ten-percent drawdowns are fairly common, occurring about every 16 months on average. A more diversified allocation aligned with upcoming income needs may help reduce volatility and reduce the risk of becoming a forced seller during market stress. Retirement planning should already account for the reality that there will be volatility, geopolitical risks and recessions along the way. Those events are uncomfortable, but they are not unusual and they are exactly why a sound plan matters,” says Haiss.

Consult a financial adviser

“If you currently feel overwhelmed by stress or fear about the future, this is an opportune time to schedule a portfolio review session with a fee-only certified financial planner, specifically to avoid being pitched financial or insurance products that carry high commissions,” says Segarra. You can use this free tool to get matched with a fiduciary adviser from our ad partner SmartAsset, as well as sites like CFP Board and NAPFA.