Would Your Retirement Portfolio Last If The Stock Market Crashed?


You worked hard for your money.

You planned for retirement. But now you’re getting nervous. U.S. stocks gained 233 percent between January 2009 and September 2017.

If you retire this year, and stocks take a dive, could you run out of money?

Image by Pixabay

Read the rest of the article here

Andrew Hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School and Millionaire Expat: How To Build Wealth Living Overseas. My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I'm happy to comment on your questions.

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10 Responses

  1. Jen says:

    This is the type of article I love reading….being an expat who has to and is developing their own pension (no social or work back ups will be coming my way). My portfolio is I feel set okay…iShares global equity ETF and global bond ETF, plus the ftse 100 ETF… But panic envelops me…I stay the course whatever the market is doing but I read so much…even on here…like stocks will fall ( this is normal) and it’s a good time for the emerging markets so I thought ant it and decided I best add an emerging mkt ETF…which I did. Now everyone says short term bonds are better than long term so I am thinking I best add a short term bond ETF. I am getting nervous because if I hold too many ETFs I won’t be able to invest enough month in them! Am I right o do this or am I diversifying too much. The global stock ETF I have is mostly development world with a minimal % in emerging mkts.

    • Hi Jen,

      Thanks so much. I’m glad you found the article useful. If anything, calmness is the most essential aspect of investing.

      I don’t change my portfolio at all…and no amount of market news would make me do so. As per my book, I own a Canadian stock index, a global stock index and a short-term Canadian bond index. The global index includes emerging market stocks. My wife owns a single, Vanguard Target Retirement fund. It contains U.S. bonds, U.S. stocks, international stocks. There’s an emerging market component in the international stock index (a global index would include both U.S. and international).


  2. Mario says:

    Hi Andrew,

    Which global stock index would you recommend? I currently own VUN, VDU and VEE and am thinking of selling all these and buying a global index… makes rebalancing much easier.

    I’m a Canadian expat. Not sure where I’ll retire. I also own XIC and VSB

    Thanks much for the great work you’re doing.

  3. Dennis says:

    Great article Andrew. I guess it depends how long you will be retiring for and where you are from. If your retirement is say 45 years, then won’t your stock allocation may have to be higher, as per some of the recent literature eg75-80% in stocks. Also, the research you mention with regards to the 4% inflation adjusted withdrawal rate is based on research in N.America. Any research on safe withdrawal rates and corresponding stock/ bond allocations on a more global scale? Thanks.

    • Hi Dennis,

      You’re right, the studies were US-based. But I believe the 4% rule would work well for international markets too. Because the US is the largest part of global market capitalization, it should always represent a large part of the portfolio. After reading your question, I backtested a portfolio of 30% US stocks, 30% international stocks, 40% bonds, using portfoliovisualizer.com. I could only take it as far back as 1986. But it was still interesting. If you retired with $500,000 in 1986 and withdrew an inflation adjusted 4% per year, you would have faced the 1987 crash, the 2000-2002 crash, the 2008 crash, the 2010 mini-crash, and after 32 years, you would still have money left. In fact, you would have more than $3 million left! That’s a lot more than you would have started with. The greatest risk of the 4% rule is dying with too much money. But that’s better than the alternative. 🙂


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