Every spring, investors begin hearing the familiar phrase, “Sell in May and go away.” The idea is simple: avoid the stock market during the summer and return in the fall. But does that strategy actually lead to better financial outcomes? The historical pattern has some basis in long-run data. The practical value has been harder to capture. Transaction costs, taxes on any realized gains, and the challenge of knowing when to get back in have frequently offset whatever seasonal effect existed. The investor who sold in May often fared worse than the one who stayed put.
Seasonal investing strategies come and go, but successful retirement planning has always been built on something much more dependable: preparation. Market headlines often encourage investors to focus on the next few months, whereas, retirement planning requires thinking in terms of decades.
For anyone within a decade of retirement, the more productive question is not what markets will do this summer, it’s whether your retirement income plan is prepared for whatever the market does. Retirees who enter retirement with a clear picture of their expected expenses, from housing and healthcare to travel and family, are better positioned to make sound decisions than those who do not. The Employee Benefit Research Institute's annual Retirement Confidence Survey consistently finds a strong link between having done a retirement calculation and feeling confident about having enough money to last.
Trying to time the market by season usually costs more than it saves. A retirement plan built to handle volatility does not need markets to cooperate every quarter.
An economy that fluctuates is not a reason to postpone retirement planning. It is a reason to make the plan more resilient. That typically involves a clear picture of guaranteed income sources (Social Security, pensions, and annuity income), a realistic estimate of portfolio withdrawal needs, and a cash buffer that can cover one to three years of living expenses without requiring you to sell at a poor time.
Market downturns, inflation, and unexpected expenses aren’t unusual events, they’re part of retirement. Building a plan that anticipates them can make all the difference.
Summer isn’t just a good time to review your investments, it’s also a good time to review your protection and confirm that your insurance coverage is current and that your estate documents are accessible. Your advisor can help you check both in a single conversation.
Summer is also a natural season for family conversations about legacy. Who will step in if you cannot manage things yourself? If something unexpected happened tomorrow, would the people you trust most know where to find your important financial information? These are practical questions, and the times when families gather are reasonable moments to raise them.
Markets will always experience seasons of uncertainty. A well designed retirement plan is built to weather those season, not react to them. Knowing what you need, preparing for the unexpected, and staying focused on your long-term goals will serve you far better than trying to predict the next market move.