Retirement changes the rules for your portfolio

Guest:	Thiago Glieger
Title:	Certified financial planner, RMG Advisors
Summary:	The move from saving to spending introduces a different kind of risk, where timing matters as much as returns. That shift can change outcomes quickly, especially in the early years of retirement.

The Federal Drive with Terry Gerton provides expert insights on current events in the federal community. Read more interviews to keep up with daily news and analysis that affect the federal workforce. Reach out to Terry and the Federal Drive producers with feedback and story ideas at FederalDrive@federalnewsnetwork.com.

Interview transcript

Terry Gerton As we think about our investment portfolios, one of the things that changes as we age, I guess, is our risk tolerance and perhaps our risk profile. How do you help people start to think about that transition?

Thiago Glieger When we think about investing, the longer the time horizon that we are looking to, the more risk or the more aggressive the portfolio can be. So this is using things like the CSNI funds and the TSP when we’re younger and starting our career, because we know over time, those investments give us the growth that we’re looking for. But that is over time. And so as we get closer and closer to not having as much time, then we have to look to other investments and people start to wonder, should I not be as aggressive? What happens if the markets fall and I don’t have as much time to recover anymore? And so their personal risk tolerance starts to reduce and become a little bit more conservative. People become more risk-averse and start to look at things like the F fund or the G fund. And this is a natural transition because we want to protect what we’ve built, especially when we’re going to need to use it the most.

        Earn CPE credit: The latest webinar from the Billington CyberSecurity Cyber and AI Outlook Series will focus on the real-world risks facing AI deployments across the federal landscape. Register now!

Terry Gerton But protecting that nest egg is one thing, thinking about protecting it from risks of inflation and helping it hold its value is another. So again, what do you think about in terms of risk diversification relative to return?

Thiago Glieger That’s a really great point because a lot of people use the term safe when they refer to the G fund. Safe from what? Safe from falling markets, safe from the loss of principle. But to your point, Terry, it’s not safe from inflation protection, right? And when we think about the idea of needing to keep growing our money because costs get more and more expensive over time and we want to maintain the lifestyle that we have today. We can’t just shovel all of our money into the safe G Fund and expect that we’ll be able to afford our lifetime forever.

Terry Gerton Even the life cycle funds tend to front load that equity risk and volatility and presume a low volatility, low risk allocation later in life and even then that might not be what’s most suitable for an individual.

Thiago Glieger That’s right, I think the TSP does a really nice job of blending the lifecycle funds between a different form of risk tolerance depending how close you are to the date that you pick. So if you’re looking out to 2070, well that’s a long time from today, so it’s going to be very aggressive in the C, S and I funds. If you’re look to the 2030, well a lot of that is going to be in the G Fund because they know if you intend on accessing the money at 2030, which is just around corner here in a few years, what if the markets fall today and don’t recover for another two or three years, which is pretty average two to three years for us to see a full recovery cycle.

Terry Gerton So you’ve mentioned before this idea of market sequencing being a risk to retirees. What should feds watch out for here?

Thiago Glieger Something called sequence of returns risk and this is one of the greatest risks that a retiree is going to face and what it means in plain English is essentially suffering poor market returns right when you’re going to draw from your portfolio right so not only are you reducing your value because you’re taking money but you’re also reducing your value because the markets are falling and so it’s a double whammy effect here. And when we look at the long-term impact of something like that, you can have two retirees with the same long-term average return, but one that suffered bad sequence at the beginning of retirement may have a completely different trajectory than one that didn’t. And so this is where we have to think carefully about how are we invested so that we are still protecting ourselves from that risk.

Terry Gerton Well, you always say you can’t really time the market, but if that happens, if you’re experiencing both market risk and volatility risk, how should a retiree plan to recover from that.

        Sign up for our daily newsletter so you never miss a beat on all things federal

Thiago Glieger I think what’s really important is that somebody think of their portfolio in retirement as having multiple different jobs. We have to use the money today to live our life, but we also still have to be growing some of the money in stocks long term to be able to fund our lifestyle long term, beat inflation and so forth. So how do you accomplish both of these tasks? If we look at the portfolio in terms of buckets, and we kind of put some of money in one bucket, some of the money in another bucket. The aggressive bucket is always the bucket that’s gonna be in stocks. And so if we’re gonna take money from a portfolio and the markets are dropping, well, if we can, let’s try not to take money from the bucket that has lost a lot of value. Let’s look at the bucket that is very safe, conservative, and that has been protected from that market volatility and let’s use that money. What that does, if you can create enough years of that short-term bucket, is it allows that aggressive bucket that fell in value. It gives it those two, three, four, five years to recover back and recover those market losses that you experienced.

Terry Gerton Thiago Glieger is a certified financial planner with RMG advisors. Thiago, I think a lot of people, when they get to retirement though, don’t want to spend every day thinking about their portfolio and which buckets are up or down. So they want an easy answer to this and maybe they assume that the G fund is that easy answer. Is it?

Thiago Glieger you know, I think the G fund is a really great tool, but it is just one tool in the toolbox It is not your entire retirement strategy. I think sometimes the idea of that safeness that comes from the safe feeling of the G fund, it’s emotionally comfortable, but It can create a future shortfall right where it’s just not replenishing your spending and growing fast enough. You know, we talked about the G Fund really just being a conservative cash position. Of course, it’s treasury because that’s the way that it’s structured, but cash-like investments are only going to give us some sort of principal protection, the government-backed security, because it’s a treasury, and that’s what we fund in the short term. But if we think about how do we invest longer term, I like the lifecycle funds a little bit because they do create that blend for you. I tend to find them a little it too conservative and too heavy in the G fund, especially if you’re aligning your retirement date with that target date fund, but there’s nothing stopping you from saying, hey, if I’m gonna start taking the money at 2030 you can still use the 2040 if you want or the 2045 or any other mix that feels comfortable to you and allows your retirement plan to meet all of its spending needs

Terry Gerton So if going all in on safety isn’t the right answer, how should retirees think about the appropriate risk that they should actually take across those buckets?

Thiago Glieger The number one job that a portfolio and the TSP and any other accounts someone has and before retirement is simply grow. When you are looking at retirement, the job changes to create something called cashflow, dollars in, dollars out. And cashflow is what I refer to as the heartbeat of retirement. It can’t stop, right? We always need that cashflow to continue. So the very first step in developing a portfolio strategy for retirement is going to be figuring out, what is my life going to cost? How much money do I need because your portfolio is going to need to generate that with your first pension, with Social Security, the three-legged stool that we all know very well about. And only then can you start to say, okay if I’m going to need $50,000 a year and I need that for the first five years of retirement. Well now you can take a chunk out of your portfolio and say what investment is best for me to meet those first five years of investments that are conservative so that I can spend my life? And then you do that for the next five years, and the next five years, then the next five years. And then, you start to actually have a strategy in place so that when all hell breaks loose in the markets and that day will come, you’re prepared and you’re ready to not make an emotional or biased decision.

Terry Gerton We’re talking about retirees who are actually starting to draw out that cashflow. What about people who maybe have five or 10 years before they’re at retirement? How should they be thinking about balancing that portfolio today?

Thiago Glieger I would say that just as you’re about to get off the exit, off the highway, on a ramp, you start to let off the gas pedal a little bit as you are coming up to the exit. You start to get into the merge lane and slow down before you actually take off that exit. And the same is true about investing. We want to be careful being too aggressive right up to retirement because when we look back to market history, the average peak to trough as we call it, or how long it for your portfolio to recover back to even again is two and a half years, but we’ve seen way longer than that. We’ve seen five years, we’ve six years, we’ve seven years. So I really like to look a decade or less at a portfolio and start to identify, maybe I shouldn’t be 100% stocks anymore. Is 80% the right answer? Is 70% the answer? I think that can only be defined within the context of a financial plan. So everyone’s a little bit different, but you don’t wanna just go from 100 miles an hour down to zero too quickly because you’re going to feel that pretty heavily.

Copyright © 2026 Federal News Network. All rights reserved. This website is not intended for users located within the European Economic Area.