Cameron Zabko, CFP®
For many widows, the fear of running out of money can loom larger than any other financial concern, especially if you’re worried you’ll outlive your savings if the stock market crashes again soon. Perhaps you’ve already experienced the disorientation that follows the loss of a spouse, and the thought of another major life disruption—like a sudden drop in your retirement accounts—feels overwhelming. At Westhollow Wealth Management, we often hear these concerns from women who are juggling the complexities of grief, untangling estate paperwork, and stepping into the role of managing the household finances for the long term.
Yet the biggest surprise for many retirees isn’t that the markets sometimes drop—it’s how much emotions can drive financial decisions when fear sets in. It’s normal to feel anxious about long-term care costs wiping out your retirement savings or to worry during those moments when the media flashes warnings of a looming correction. In reality, crashes have happened before, and markets typically recover, but the experience can still feel like freefall if you don’t have a clear plan in place.
When we help widows navigate life after loss, market volatility is often a centerpiece of the conversation. Some of our clients confess to checking their portfolio balances multiple times a day when volatility spikes, feeling that twinge of panic whenever the numbers dip. Research suggests this behavior is more common than you might imagine: one recent survey found that 50% of retirees increased how frequently they checked their accounts during periods of market swings, leading many to feel greater stress and uncertainty.
Emotional decision-making can amplify the damage of a market downturn. Selling in a panic might lock in losses that would otherwise have been temporary, turning a short-term dip into a long-term setback. Those who remained disciplined through past crashes often recovered significantly; for example, investors who stuck to their plans during the 2007–2013 crisis saw their account balances grow by 86%, while panic sellers locked in losses. It’s a cautionary tale that underscores why having a guided, long-term plan matters—especially during those times when your heart tells you to act out of fear.
One of the most challenging hurdles is that grief itself makes you more susceptible to emotional triggers. Losing a spouse is a deeply personal and devastating event. Compounding that with a sinking retirement account can create a potent mix of anxiety, making it paramount to have a resource or partnership that helps filter out the noise and emotional static. Our goal at Westhollow is to help you navigate these uncertainties without ever feeling isolated or uninformed.
Women, and particularly widows, often face a higher risk of outliving their assets. On average, women live longer than men, meaning that retirement can span decades—potentially longer than you initially planned for. This is what we call longevity risk. The concern isn’t just the possibility of living to 90 or beyond, but also how a long life intersects with market events, healthcare expenses, and inflation.
Another factor that may keep you up at night is known as the sequence of returns risk. If a major market decline occurs early in your retirement, it can deliver a significant blow to your portfolio, forcing you to withdraw from a shrinking pool of assets. The challenge is that today’s retirees no longer have the luxury of modest inflation rates or assured pension income, so sequence of returns risk becomes a real puzzle. Handling it effectively often requires a carefully executed plan to harvest from stable assets in tough years and preserve growth-oriented investments for the future.
And then there’s the rising cost of healthcare. Even if you’re primarily healthy at 60, chances are that as you age, medical needs will become more frequent and more expensive. Long-term care is also a growing concern, and many people wonder if they’ll have enough cushion to cover serious health events. For insights on how changing benefits may impact your budget, you might explore our overview on future Social Security COLA and Medicare costs for widows. Balancing that need for peace of mind with keeping pace in a volatile market isn’t always straightforward. This is where purposeful planning can help demystify the details and align your finances with the realities of living comfortably for 20 or 30 years after work.
For some widows, the temptation is to go very conservative right away—thinking, “I can’t afford another big drop in the market.” While it may feel safe to move most of your money into bonds or cash, this approach can introduce a new set of risks. Overly conservative allocations may not keep up with inflation, meaning your expenses could grow faster than your assets. If your investments don’t generate sufficient growth, you’re more likely to dip deeper into principal, increasing the chance you’ll run out of money down the line.
On the other hand, if you remain heavily invested in stocks, a severe downturn shortly after you retire can significantly affect your nest egg, especially if you’re already making withdrawals. Balancing these competing concerns involves maintaining an allocation to equities for long-term growth, while also holding enough in calmer assets to weather a temporary market storm. If you’re wrestling with whether to keep or sell concentrated shares, our Widow’s Guide to Company Stock Decisions can help clarify the trade-offs.
You may have heard of something called the “4% rule,” which, in simplified terms, suggests withdrawing about 4% of your retirement balance each year and adjusting for inflation. Yet no single rule can substitute for a plan tailored to your situation. Markets change, interest rates fluctuate, and your personal goals are likely to shift over time. What might feel right at 55 could look different a decade later. The key is a balanced approach that avoids lopsided extremes.
Having a strategy to manage your withdrawals and build a buffer against imminent market drops can ease the anxiety of seeing your portfolio value fluctuate. One approach we often recommend to widows is keeping a modest reserve—sometimes called a “cash wedge”—that covers about one to two years’ worth of essential expenses. The exact size of this cushion varies from person to person, but it serves as a short-term safety net, allowing you to pay bills and fund your lifestyle without needing to sell longer-term investments at depressed prices if the market slumps.
Automatic portfolio rebalancing is another practical step that takes emotion out of the equation. Instead of manually deciding which holdings to sell or buy after every big swing, rebalancing moves money from overweighted assets (assets that have increased in value) to underweighted (assets that have declined in value) ones on a consistent schedule—keeping your risk profile where it’s meant to be. In turbulent markets, many people succumb to the fear of watching their equities drop and sell the "losers" which locks in loses. Rebalancing systematically can help you buy low and sell high, even when your gut wants to do the opposite.
At the same time, it’s wise to remember there are ways to minimize required cash reserves while staying safe—by integrating flexibility into your withdrawal strategy. If your portfolio dips in a downturn, consider temporarily reducing elective expenses—like taking fewer trips—or postponing large discretionary buys until conditions improve. For additional ideas about turning assets into steady income streams, see our guide on replacing a paycheck with your late husband’s investments. Staying flexible about spending patterns helps you weather off-seasons in the market without dragging down the long-term health of your retirement funds.
Those who have experienced a market downturn firsthand know how forceful fear can be. It’s not just numerical losses—it’s the emotional whiplash of seeing your net worth shrink on paper, which can feel like a direct threat to your sense of security. Unfortunately, history has shown that reactionary moves—selling everything, moving entirely to cash, or flipping your allocations in a hurry—often lead to missing the eventual recovery. The market’s best days can come swiftly, and if you’re out of the game, you miss out.
That’s why regularly reviewing your plan can serve as a powerful antidote to panic. Quarterly or semiannual check-ins ensure your financial strategies align with your life’s realities. If something changes—perhaps you remarry, downsize your home, or shift your travel goals—an up-to-date strategy can adapt. We’ve seen retirees who stayed disciplined during big crashes eventually benefit from the market’s upswing, illustrating that fear-driven selling can do more harm than good. The key is having guardrails and a structured approach to withdrawals, so there’s never a need for impulsive decisions.
After losing a spouse, you may feel like you’re being asked to rebuild an entire life plan. Financial clarity can offer stability in that process—but you don’t have to navigate it alone. At Westhollow Wealth Management, we take the time to meticulously examine every piece of your financial puzzle, from income sources and insurance documents to tax considerations and philanthropic goals. Our purpose is to transform overwhelming decisions into a straightforward, comprehensive strategy that lets you maintain your independence without constantly looking over your shoulder.
We also recognize that widowhood isn’t simply a event on a timeline; it’s an ongoing journey with emotional and practical dimensions. The deeper emotional support we offer goes hand in hand with our technical expertise, and that’s something we believe sets us apart. We aim to be more than just your financial advisor—we strive to be a compassionate ally, ensuring you never feel rushed or isolated when important choices arise. If you’re evaluating professionals, our checklist on how to find an honest financial planner experienced with widows can help you ask the right questions.
If you’re ready to explore options that align with your specific goals, schedule an intro call to talk through your concerns. We’ll take the time to understand your life, your hopes for the future, and how we can create a personalized plan that adapts to changes—whether they come from the market, the tax code, or the many transitions life can bring.
How do I know if I’ve saved enough to handle another market crash?
Ultimately, it’s less about the absolute balance in your retirement accounts and more about whether your withdrawal plan, spending habits, and asset allocation can withstand temporary market losses. A detailed retirement income analysis can stress-test how your savings might hold up under different scenarios, including severe downturns. This process can show you exactly how long your money might last, given various assumptions about rates of return and inflation.
Do I need to completely stop spending if the market dips?
Not necessarily. Cutting out all spending in a down market can be an extreme measure and may do more harm than good to your quality of life. A more balanced approach is to maintain a comfortable safety net, potentially cut back on certain discretionary expenses, and trust that your plan was designed to accommodate different market conditions. Temporary reductions in big-ticket spending can help, but there’s no need to halt every part of your lifestyle the moment markets dip.
Isn’t it safer to move all of my money out of the stock market now?
Moving everything to cash can feel like a short-term fix, but it introduces significant risks in the longer term. Inflation can steadily erode the purchasing power of idle cash, and you miss out on the growth stocks typically provide. With careful planning—such as a cash wedge to cover near-term expenses and a diversified portfolio to spread out risk—you can position yourself to handle downturns without sacrificing long-term growth potential.
At the end of the day, many retirees find peace of mind in a plan that skillfully balances near-term security with long-range growth. That’s exactly what we strive to achieve with our clients at Westhollow Wealth Management. If you’ve been feeling on edge and worried you’ll outlive your savings if the stock market crashes again, remember that you have tools, strategies, and partnerships available to help you weather the unknown. Combining professional guidance with flexibility and composure can be the difference between sleepless nights and a retirement rich with the peace of mind you deserve.
