The market is down 20% and I planned to retire at 50 with $2.5 million – will I need to delay my plans?

The stock market has experienced its share of upheaval since early April, when tariff policies were announced. Since then, many people’s portfolios have lost a substantial amounts of value.

If you’re nowhere close to retirement, that may not be a problem. It’s still disheartening to see your portfolio value take a dive. But if you’re not going to be using that money for many years, you have time to ride out this wave of volatility.

This Reddit poster, however, is in a different boat. They’re 45 years old with plans to retire at 50, which means they have some time for their portfolio to recover from this most recent downturn, but not a ton.

They were hoping to get to $2.5 million by age 50. But since they’re down 20% following recent market events, they’re not sure their goal is still attainable. They’re wondering whether they’ll need to push their retirement data out to age 52, or even 55.

Since I don’t have a crystal ball, I have no idea how long it will take the stock market to recover from this month’s events. And for all we know, the worst isn’t even over yet. But I do think there’s a very important lesson to be learned here.

Be careful with stocks when retirement is near

I would never tell someone who’s on the cusp of retirement to not invest in the stock market at all. But I also think it’s important to move away from stocks to a large degree when you’re in the home stretch of your career and retirement is only a few years away.

I don’t have access to the poster’s portfolio, so I can’t saw how their assets were allocated. But what I can say is that someone who’s five years away from retirement should not have 100% of their portfolio in stocks, or 95%, or even 90%.

It may be that the poster invested aggressively to meet an early retirement goal. But generally speaking, it’s important to temper your risk when you’re getting closer to ending your career — whether you plan to do so at 50, 55, or 65.

Sometimes, plans need to be tweaked

The poster says that if the market recovers quickly, they’ll be able to potentially meet their original retirement target date. If not, they’ll have to postpone.

It’s good that the poster is willing to be flexible. Retiring early with insufficient cash reserves could be disastrous.

But people who invest too aggressively in stocks into their 60s may not have the same easy option to delay retirement. So it’s important to talk to a financial advisor to make sure your portfolio is allocated appropriately given your age and retirement plans.

Along these lines, I think the poster here should speak to a financial advisor and find out what next steps to take. It may be that an advisor would tell the poster to make some portfolio shifts now to avoid having to postpone retirement even longer.

There’s no telling how long it will take the stock market to recover from its recent tumble. Some stock market downturns are short-lived, while others last for years. So let this serve as a wakeup call to have a portfolio that aligns with your retirement timeline. That means not going all-in on stocks when you’re close to quitting the workforce for good, despite the potential upside.

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