Election-Year Volatility: What Retirees Should (and Shouldn't) Do
Markets have opinions about elections. Your plan shouldn't. A framework for staying invested without ignoring real risk.
Every election cycle brings the same conversation: should I sell before the vote? Based on decades of return data, markets have delivered positive long-term results under many combinations of parties in Washington. What often matters far more is how your plan is built. Past performance does not guarantee future results.
What actually matters for retirees
- Do you have enough short-term income set aside to avoid selling stocks in a drawdown?
- Is your allocation matched to when you need each dollar, not to the news cycle?
- Do you have a written rebalancing rule, so decisions aren't made emotionally?
One reasonable response
If election-year noise is affecting your sleep, that's often a sign your allocation is more aggressive than your plan requires. Rather than timing the vote, consider whether your income floor — Social Security, pensions, bond ladders, or annuity income — actually covers your essential expenses. When it does, market noise becomes background.
Frequently asked
Questions Scottsdale retirees ask us
- Should I move to cash before an election?
- Historically, moving to cash around elections has hurt more than it has helped, largely because the biggest single-day rallies often occur near the worst declines. A better response is to confirm your near-term income needs are covered without selling stocks.
- How do markets typically perform in election years?
- Historical data shows positive average returns in most election years, though volatility often rises in the months leading up to the vote. Past performance does not guarantee future results.
- What is an income floor?
- An income floor is the amount of guaranteed or highly stable income — Social Security, pensions, bond ladders, annuities — that covers your essential expenses regardless of what markets do. Building one is often the single most effective response to volatility.