Stock market dips can be most harmful to portfolios during the first five years of retirement, which is the “danger zone,” according to Arnott.

If you withdraw money when asset values have fallen, there are fewer funds available to capture growth when the market rebounds, she said. 

The phenomenon of poorly timed withdrawals paired with stock market losses is known as “sequence of returns risk,” and it could boost your chances of outliving retirement savings, Arnott said. 

Negative returns cause more damage to portfolios early in retirement than later, according to a 2024 report from Fidelity Investments.

However, if you don’t tap your nest egg when the market is down, “you’re clearly going to change the dynamics, and you have a better chance of recovering,” said David Peterson, head of advanced wealth solutions at Fidelity.

Typically, the first bucket should be “highly liquid,” like cash, and include one to two years of living expenses after subtracting guaranteed yearly income, such as Social Security or pension payments, recommends Christine Benz, director of personal finance and retirement planning for Morningstar.

“If you’re always spending from a cash bucket, then you don’t have to worry as much about making withdrawals when the market is down,” Arnott said.

The second bucket, which covers the next five years of spending, could be in short- to intermediate-term bonds or bond funds, and income distributions can replenish spending from the cash bucket, she said.   

After that, you’re investing long-term in the third bucket, focused on growth with primarily stock allocations, depending on risk tolerance and goals.  

President Donald Trump’s nominee to lead the Social Security Administration, Frank Bisignano, faced senators’ questions on Tuesday as to how involved he has been with recent changes at the agency under the Department of Government Efficiency.

The unofficial government entity known as DOGE has been tasked by the White House to root out waste, fraud and abuse in the federal government, including at the Social Security Administration, which provides benefit payments to millions of Americans each month.

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Following changes put in place by DOGE, including staff cuts and plans to close field offices, the Social Security Administration’s phone lines often go unanswered, the website is crashing and “seniors are getting lost in the system,” said Sen. Ron Wyden, D-Oregon, ranking member of the Senate Finance Committee.

The hearing, Wyden said, provides Bisignano, who is CEO of financial payments technology company Fiserv, to “tell the American people whose side he is on” — either the side of American workers or DOGE “bureaucracy.”

On March 20, federal judge Ellen Lipton Hollander issued a temporary restraining order that barred DOGE from accessing personally identifiable information at the Social Security Administration. She also told DOGE affiliates to delete any such info currently in their possession.

That includes Social Security numbers, medical provider information, medical and mental health treatment records, employer and employee payment records, employee earnings, addresses, bank records and tax information.

In a February CNBC interview, Bisignano said he “100%” plans to work with DOGE to identify potential waste, fraud and abuse at the agency.

“I am fundamentally a DOGE person,” Bisignano said during his CNBC appearance.

When asked to clarify that comment at the Tuesday Senate hearing, Bisignano said he has prioritized efficiency before there was such a word as DOGE.

Bisignano also said he would not knowingly allow personally identifiable information to be viewed by unauthorized personnel.

The U.S. Department of Treasury is scrapping a requirement for U.S. small businesses to report information about their owners to the federal government. It’s the latest twist in an on-again-off-again saga for the fledgling rule.

The Corporate Transparency Act, passed in 2021, required millions of businesses to report basic information on their “beneficial owners.” By identifying who owned certain entities, lawmakers sought to curb criminal activity and illicit finance conducted through opaque shell companies.

The rule was set to take effect on March 21, following months of delays in court. It carried financial penalties, potentially thousands of dollars, for noncompliance.

However, the Financial Crimes Enforcement Network — also known as FinCEN, which is part of the Treasury — issued an interim final rule on March 21 exempting all U.S. citizens and U.S. companies from the reporting requirement.

The rule is open to public comment and set to be finalized later this year.

FinCEN estimates that this revised reporting requirement will apply to about 20,000 entities in the first year — greatly reduced from the 32.6 million entities, including certain corporations, limited liability companies and others previously estimated to be subject to the reporting requirement in year one.

Most of the Western world already has such requirements in place, Bryan said.

FinCEN declined to comment for this story.

The Trump administration had already suspended enforcement of the requirement earlier this month. Civil penalties could have amounted to as much as $591 a day, in addition to up to $10,000 in criminal fines and up to two years in prison.

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The Treasury “reassessed the balance between the usefulness of collecting [beneficial ownership information] and the regulatory burdens imposed by the scope of the Reporting Rule,” Gacki wrote.

Officials took illicit finance risks, alternative sources of information, the “burdens” of data collection and the public interest into account, she wrote.