When transitioning into retirement, one of the most profound challenges many retirees face is psychological and emotional.

It's not just about adjusting your portfolio for a new phase of life; it's about fundamentally changing the way you think about money. For decades, many individuals have approached investing with a focus on growth, striving for double-digit returns and accumulating wealth as aggressively as possible.

But retirement is an entirely different animal. Managing money in retirement requires a whole new mindset—one that prioritizes security, income, and risk management over chasing the highest returns.
 

The issue, however, is that we are creatures of habit. If someone has been investing a certain way for 30 or 40 years—putting money into the market, buying stocks, bonds, and mutual funds for growth—making wholesale changes to this approach can feel daunting.

It’s hard to break away from the mindset that was ingrained during the accumulation phase of life, especially when it's been so successful for so long. Yet, this shift in mindset is essential to not just surviving in retirement, but thriving.

 

Why It’s So Hard to Change
 

For most of our working lives, we’ve been conditioned to measure our financial success through the lens of "rate of return." The higher the return, the better. We’ve celebrated periods of high growth—whether it was during the 90s dot-com boom or the post-2008 recovery—and the natural instinct is to want to replicate those results in retirement.
 

But retirement is fundamentally different. Once you're no longer earning a paycheck, your portfolio becomes the primary source of income. It's no longer about the percentage returns you can rack up—it's about how efficiently you can generate a predictable, reliable stream of income for the next 20, 30, or even 40 years.

And in retirement, the risk and return equation changes.

 

Shifting From Growth to Security: The Importance of Risk-Adjusted Returns
 

In the accumulation phase of life, risk is often an ally. The more risk you take on, the more potential there is for reward. As a result, portfolios are often heavy in stocks, focused on maximizing growth. But this approach becomes less viable when you're living off the portfolio’s income.

During retirement, the focus should shift to risk-adjusted returns, not pure returns.
 

Once you’re in retirement, the market is no longer your partner—it's something you depend on for income. So, depending on the market to “cooperate” with your income needs for the next several decades becomes a much riskier proposition.

Just because the stock market has been rising steadily for the past decade doesn't mean it will continue to do so indefinitely. As the saying goes, “A rising tide lifts all boats,” but how long can this artificially inflated bull market last?
 

The reality is that retirees can no longer afford to take on the same level of risk they did in their younger years. High returns are great, but if you're gambling with your future security, you could be playing with fire. Many retirees have learned this lesson the hard way.

Statistics show that taking too much risk in retirement can result in premature depletion of assets and, in some cases, force individuals to return to work after they thought they were done for good.

 

The Rule of 100: Why It's Critical to Rewire Your Belief System
 

The "Rule of 100" is a simple, yet powerful guideline to help you rethink your portfolio's risk profile in retirement.

It suggests that the percentage of your portfolio invested in stocks should roughly equal 100 minus your age. So, a 60-year-old retiree would have no more than 40% of their portfolio in stocks. This rule of thumb is designed to ensure that as you age, your portfolio shifts from growth to income and preservation.
 

Many people are reluctant to follow this rule because they associate it with a "boring" or "conservative" portfolio. But that’s the wrong perspective. A well-designed retirement portfolio is about securing a lifetime income stream that meets your needs without subjecting you to the volatility of the market.
 

When you make the transition from a growth phase to an income phase, it doesn't mean you have to abandon the idea of growth altogether. It just means that your income needs to be secured first.

Once those needs are met through guaranteed income sources (such as laddered annuities), then you can allocate additional capital for growth if that's your preference.

But, the first step should always be ensuring predictable income for the rest of your life. After all, without income, you're left hoping the market continues to be kind to you.

 

Why Laddering Lifetime Income Annuities is Crucial
 

This is where laddering lifetime income annuities comes in as a game-changer for retirement income planning. Annuities, especially when laddered across multiple start dates, can provide guaranteed income for life, ensuring that you won’t outlive your money.

A well-structured annuity ladder can provide up to 20-60% more income than traditional income-producing assets like bonds or CDs, which ultimately requires much less capital to generate the same level of income.
 

This shift means that retirees don’t have to rely entirely on a risk-bearing portfolio that may or may not produce the returns they need. By offloading the risk to an insurance company (through annuities), retirees can free up a substantial portion of their capital to remain invested in growth assets, if desired, without the pressure of needing these assets to generate immediate income.
 

To illustrate this, consider that a portfolio generating income through the typical 4% withdrawal rule may produce significantly less income than a laddered annuity portfolio.

For example, a $1 million portfolio following the 4% rule generates $40,000 in annual income. However, the same $1 million invested in a well-structured annuity ladder could potentially generate $60,000 - $80,000 annually. The difference in income is substantial -- in some cases double -- and it comes with far less risk.

 

The Dangers of Taking Too Much Risk in Retirement
 

Historically, there have been numerous examples of retirees who took on too much risk and paid the price. The dot-com bubble in 2000, the 9/11 downturn, and the 2008 financial crisis all caused significant losses for those who didn’t properly adjust their portfolios for the income phase of life.
 

According to studies, retirees who continued to withdraw from portfolios based on pure growth (rather than securing income first) often saw their portfolios decimated during these crises. Many were forced to return to work or delay their retirement altogether.
 

For example, a study by the Journal of Financial Planning found that during the 2008 financial crisis, retirees who had failed to adjust their portfolios for a lower-risk, income-oriented approach were at a far higher risk of running out of money. Those who had a larger proportion of guaranteed income from annuities or other secure income sources weathered the storm much better.
 

The message is clear: If you don't redesign your portfolio for the income and preservation phase, you're increasing your risk of running out of money and living a less secure retirement.

 

Conclusion: Why Re-Wiring Your Belief System Matters
 

The biggest mistake many retirees make is failing to acknowledge that retirement is a new season of life with new priorities. Just as a farmer must change their approach to planting when the seasons change, so too must investors change their approach when transitioning from the accumulation phase to the retirement phase. Pure growth, high returns, and risk-taking are no longer the primary focus.
 

It’s time to rewire your belief system. The goal is no longer to accumulate as much as possible, but to generate secure, reliable income to sustain your lifestyle throughout retirement. This involves redesigning your portfolio to protect against the risks associated with market downturns and ensuring that your income needs are met with guaranteed sources. By doing so, you free up capital for potential growth while safeguarding your financial future.
 

The reality is, retirement planning is not about keeping up with the latest market trend or chasing high returns. It’s about security, risk management, and sustainability. If you can shift your mindset away from pure rate of return and focus on the bigger picture—long-term stability, risk management, and securing your income—you will be far better positioned to enjoy a fulfilling and financially secure retirement.
 

So, take the time to rewire your financial beliefs. Design your portfolio for income, not just growth, and protect your retirement from unnecessary risks. When you do, you’ll be able to enjoy the next chapter of your life with confidence and peace of mind.