[fsckboy]

>How would it affect retirees if they dropped 40-50%, likely taking the market with them?

a drop of 40-50% in the S&P 500!? That didn't even happen in the market crash of 1929. It would lead to unemployment and breadlines for the majority of the population, and retirees would get in line like everybody else. Making income from your savings requires a productive economy; bonds are not the answer because bonds also stop getting paid, and even govt bonds would be erased by inflation.

it's just not a scenario that should be on your radar, the chance is tiny, and the result would be completely non-linear. if you tried to hedge yourself against that, not only would you fail (it's simply out of your control, like an earthquake or tornado), you also wouldn't make any income in good times, and most times are good and it's sensible to plan for that retirement.

[kbcool]

The S&P 500 has dropped over 40% multiple times including 1929. It did it in the 70s, 2000 and 2008/9.

The COVID crash nearly hit those levels also