A sinking stock market can drag a good retirement down with it. TIP SHEET’s Linda Stern asked Michael Kitces, director of financial planning at Pinnacle Advisory Group in Columbia, Md., how new retirees can protect their spending power.

Why does it matter what the stock market is doing at the time that someone retires?
The greatest risk to a retirement plan is a significant market decline in the early years. This can diminish a portfolio so severely that even when the good returns finally arrive, there just isn’t enough left to fund the remainder of retirement. An individual with a $500,000 portfolio who experiences a 15 percent market decline in a year, and also withdraws 7 percent of the portfolio, may deplete the portfolio to $390,000 at the end of the first year. This requires a whopping 28 percent return just to break even again at the end of the second year.

What advice do you have for someone who retired on Jan. 1 and saw his nest egg shrink?
The decline since Jan. 1 should not have derailed a welldesigned retirement plan. Delaying major expenditures, like car purchases or home renovations, can help get an aggressive plan back on track.

What about someone who has involuntarily retired?
For some, there aren’t enough savings yet. Often part-time work, or full-time work in a more personally but less financially rewarding job, can go a long way to bridging the gap by allowing the current investment portfolio time to grow.

Should retirees sell their stocks and buy bonds?
This is not a prudent strategy. Although the ride for stocks can be bumpy, bonds will almost assuredly be incapable of generating enough wealth to buy the necessities (and some niceties) of life several decades from now. If you don’t have a plan on how to invest back into the markets, be careful about pulling too much money out of them!