Episode #80: Stock Market Volatility vs Guaranteed Income: Which Wins?

The ups and downs of the market aren’t just numbers on a screen—they’re emotional triggers. It often starts with excitement as prices go up and a sense of urgency to buy in before it’s “too late.” But when things turn south, panic sets in. Investors double down, hoping to catch a deal, only to sell in frustration after further losses. Then, when the market rebounds, regret creeps in and the cycle starts all over again.

It’s a pattern many people fall into:

• • Market rises: “I need to buy now before it’s too late.”

• • Correction begins: “This is a buying opportunity.”

• • Market drops more: “I’ll double down—can’t go lower.”

• • Market bottoms out: “I’m out. I’ll never do this again.”

• • Market recovers: “Maybe I’ll give it another shot…”

Even seasoned professionals fall into this trap when managing their own money. The problem isn’t the market—it’s our emotions.

Why Most Investors Buy High and Sell Low

“We’re always seeing people that are buying high and selling low.”

The phrase “buy low, sell high” is simple, but it’s rarely followed. Why? Behavioral finance gives us a few reasons:

• • Overconfidence: We think we can time the market better than we actually can.

• • Loss aversion: The pain of losing $1,000 is stronger than the joy of gaining $2,000.

• • Gambler’s fallacy: We look for patterns and believe we can “crack the code.”

Even financial professionals admit they struggle with these behaviors. If the experts can’t control their emotions, what does that say for the average investor trying to manage a retirement nest egg?

You Can’t Stay on the Rollercoaster Forever

Staying in the market for the long haul makes sense—up to a point. Stocks are historically the best way to outpace inflation and build long-term wealth. But that doesn’t mean every dollar you have needs to be in the market, especially in retirement.

You need a smoother ride.

One option is the classic 60/40 portfolio (60% stocks, 40% bonds), which reduces risk but also limits growth. Another option? Carve out a portion of your savings to create guaranteed income—so your living expenses aren’t at the mercy of market swings.

The 4% Rule vs Guaranteed Income

Here’s a simple comparison using actual market data from the last 25 years (2000-2024). This couple wants to withdraw $40,000 annually with a 3% raise each year.

Strategy at 65 yrs old	Withdrawal Method	Portfolio Value in Early 90s
60/40 Portfolio	4% Rule + 3% inflation	~$25,000
Income Annuity + 60/40	$40K from annuity, rest in market	~$600,000

Both start with $1,000,000. But the second couple uses ~$563K to buy guaranteed income, and invests the rest. That second approach ends up with over $575,000 more by their early 90s—all while avoiding the stress of market ups and downs.

How Sequence of Returns Can Wreck a Plan

Here’s the kicker: when you retire matters. If that same couple had been in the S&P 500 and retired in the year 2000 and followed the 4% rule, they’d be out of money in 18 years due to poor early returns.

But if they used a guaranteed income annuity for the same $40K and invested the rest, they’d still have ~$600K left.

Flip it to a positive market stretch of the S&P 500—like retiring in 1995—and their portfolio grows to nearly $4 million.

It’s not just about average returns. It’s about when you get them. That’s why creating a stable base of income in retirement is so important.

A Simpler Way to Stay on Track

“This is about getting off the emotional rollercoaster.”

Retirement shouldn’t feel like guessing when the market will recover or who will win the next election. When your core income is guaranteed, you’re free to enjoy retirement instead of worrying about it.

An annuity won’t solve every problem, and it’s not right for every dollar. But for many retirees, it can be a key piece of a plan that offers:

• • Predictable income
    

• • Principal protection
    

• • Less emotional stress
    

And at the end of the day, if you get the same or better result with more peace of mind, that’s a win.

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Want to see how this works in your plan?
Watch my flagship video series—20% More Spendable Income in Retirement—and see how guaranteed income might help you keep more of your money and stress less along the way.

▶️ Watch the full video series here

If you’re wondering how it could apply to your situation, just click the “Schedule a Call” button on the site to book a short time with me.

Wishing you all the best in your financial education,

Marty Becker

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Podcast Episode #80: Stock Market Volatility vs Guaranteed Income: Which Wins?

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