Retiring Soon? Here's How Experts Say You Should Invest Right Now

June opened with three simultaneous records – and a fresh Iran escalation that oil felt more than equities did.

The quick scan: Monday delivered a clean start to June. All three indices closed at record highs, the Nasdaq crossed 27,000 for the first time, and the S&P 500 briefly touched 7,600 intraday. Tech led the way again. The complicating detail: over the weekend, Iran shot down an American drone, and the US responded by bombing radar and drone sites inside Iran. Oil rose sharply on the news. Markets absorbed it and kept climbing regardless.

S&P 500: +0.26%, 7,599.96 – A tenth consecutive record close; May's 5% monthly gain is now the launchpad for June
Dow Jones: +0.09%, 51,078.88 – Fractional gain, held near the 51,000 milestone; energy stocks contributed while the broader index was anchored by tech
NASDAQ: +0.42%, 27,086.81 – First close above 27,000; Nvidia (+6.2%) led after unveiling a new PC processor. Dell (+10%) and HP (+8%) followed. Intel (-4%) was the notable loser as Nvidia encroaches on its home turf.

What's driving it: The weekend Iran escalation – drone shootdown followed by US airstrikes – sent oil higher and raised the spectre of a ceasefire reversal. But markets have spent four months absorbing Iran headlines and largely stopped reacting unless something signals a fundamental change in trajectory. The bigger driver was Nvidia: a new PC chip targeting the AI-on-device market, priced immediately by the market. Evercore ISI noted that Nvidia, Micron and Alphabet alone account for more than 40% of the year-to-date revision in S&P 500 earnings estimates – powering the index but concentrating its risk.

Bottom line: Ten consecutive record closes and a Nasdaq above 27,000 – a year that began with a war has produced one of the stronger calendar-year starts in recent memory for investors who stayed the course. The Iran drone incident is a reminder that the ceasefire remains fragile and oil stays the transmission mechanism for inflation. The structural improvement is real; the risk hasn't disappeared.

The Wealth Experts' Playbook for the Last Five Years Before Retirement

The scoop: "Should I cash out now?"

If you're two to five years from retirement, this question has probably crossed your mind more than once this year. Markets have been volatile. Inflation has been sticky. Geopolitical risk has been real and persistent. Every headline about oil prices or interest rates or US credit downgrades seems to land differently when you're close to the finish line.

The Business Times asked three Singapore wealth experts – from Arta Finance, OCBC Wealth Advisory, and Farro Capital – to answer the questions that pre-retirees are actually asking. Their responses form the basis of this issue.

The biggest risk nobody expects

What is the single greatest risk for someone retiring in the next two to five years?

Brandon Ho, a chartered financial analyst and head of investment advisory at Arta Finance, names it directly: sequence of returns risk. "This is the risk that a sharp market drawdown at the start of retirement derails an individual's retirement plan and increases the likelihood of running out of money."

When you're still working, a market dip is an opportunity – you're buying cheaper assets while income continues. When you're retired, the same dip forces you to sell assets at depressed prices to fund living expenses. Those sold units are gone; they can't recover alongside the market. Afdhal Rahman, executive director of wealth advisory at OCBC, states it plainly: "Withdrawals in bear markets are more costly than withdrawals in bull markets."

The antidote is a cash buffer that allows spending without liquidating investments during downturns. But the cash buffer has its own risk.

Why cashing out entirely is still a mistake

The instinctive response to market volatility close to retirement is to move everything to cash or fixed deposits. The experts are consistent: it's a costly mistake.

"A portfolio concentrated entirely in cash may appear stable in nominal terms, but in real terms, it can steadily lose ground," said Ho. At a 3% inflation rate, the cost of living doubles roughly every 24 years. A retiree who moves to full cash at 62 and lives to 86 will find their money buys significantly less – not because of market volatility, but because of inflation's quiet arithmetic.

Cash should be seen as a strategic buffer, not the dominant allocation.

The glide path: shifting from growth to income

The positive alternative is a deliberate transition – what the experts call a glide path – from a growth-oriented portfolio to a more income-oriented one, executed gradually over the years approaching retirement.

Hamza Ayub, chief strategist at Farro Capital, recommends moving from a growth-focused allocation to a balanced one, targeting 40 to 50 per cent in equities and 50 to 60 per cent in bonds. His practical rule: increase the weight of bonds by roughly 5 per cent each year as retirement approaches.

Afdhal echoes the direction: reduce exposure to higher-volatility growth assets and increase allocations to defensive and income-oriented instruments. In practice, this means trimming equities and high-yield credit, and rotating toward higher-quality fixed income, lower-volatility dividend equities, and real estate investment trusts.

The principle is that income-generating assets provide what growth assets don't: predictable, reliable cash flows that don't require selling. When the portfolio produces income, you're spending the income rather than liquidating the principal. The principal – and its ability to generate future income – remains intact.

The three-bucket structure

Ho's most practical recommendation is structuring the portfolio into three distinct buckets.

The liquidity bucket holds capital for the next one to three years of withdrawals and unforeseen expenses – safe, accessible instruments that prevent market downturns from forcing the sale of growth assets.

The retirement bucket holds assets designed to support spending throughout retirement: equity income, REITs, balanced funds. It can tolerate more volatility because the liquidity bucket has the near-term covered.

The generational bucket holds capital not required for retirement, intended for future generations or philanthropy – the longest time horizon, the most risk capacity.

As retirement approaches, capital for near-term spending gradually moves from the retirement bucket into the liquidity bucket. The portfolio de-risks naturally, without a single dramatic change.

"This transition naturally de-risks the overall portfolio by ensuring that early retirement withdrawals can be funded without selling growth assets in case of market downturns," Ho said.

The CPF advantage for Singapore investors

For Singaporean readers, CPF changes the equation in a meaningful way.

CPF Life provides a stable, risk-free income floor. A retiree drawing on CPF Life for basic income is less likely to sell investments at depressed prices during market stress – reducing direct exposure to sequence of returns risk. "During market stress, a retiree who can depend on CPF Life for basic income is less likely to sell investments at depressed prices to meet living expenses," said Afdhal.

Because CPF provides predictable lifelong payouts, the personal portfolio can be structured more patiently than it would need to be without that floor. The caveat, as Afdhal notes: it's not a licence for indiscriminate risk-taking. CPF doesn't protect against inflation or rising healthcare costs. It's a floor, not a ceiling.

Tuning out the noise

How do you maintain discipline when headlines are screaming? The answer is to use structure rather than willpower.

Ayub's framing is the cleanest: investing is a game of asset allocation, diversification, and discipline. Those three elements in place mean there's no need to respond to market noise.

Afdhal's filter is simple: ask whether the market event materially affects your income needs for the next few years or decades. If not – and most events don't – it's noise.

Ho's trigger for revisiting the plan is a structural shift: a permanent change in retirement income expectations, a major healthcare expense, or inflation materially altering spending needs. Daily market moves don't qualify.

"The goal is not to eliminate volatility," Ho said, "but to prevent it from derailing retirement outcomes."

Actionable Takeaways for L-Plate Retirees:

• Understand sequence of returns risk specifically, not just "market risk" generally. The damage from a bad early retirement period is permanent in a way that mid-career downturns are not. Build your plan around this specific mechanism: withdrawals during bear markets destroy units that can never recover. The liquidity buffer exists precisely to prevent forced selling.

• Begin the glide path now if you're within five years of retirement. Increase bond allocation by approximately 5 per cent per year. Rotate from high-volatility growth assets toward dividend equities, quality fixed income, and REITs. The shift should be gradual and deliberate, not reactive to a single market event.

• Build the three-bucket structure before you need it. Liquidity (1–3 years of spending needs), Retirement (long-duration income-generating assets), and Generational (long-horizon growth). Getting this structure in place before retirement means the transition from accumulation to drawdown doesn't require a complete portfolio rebuild at the worst possible moment.

• For Singapore investors: maximise CPF Life as an income floor, not just a savings account. Delaying drawdown to increase CPF Life payouts reduces the amount your personal portfolio must produce – which directly reduces your sequence of returns exposure. The income floor changes the risk maths of everything else.

• Cash is a buffer, not a strategy. One to two years of expenses in safe, liquid instruments protects you during downturns. A portfolio entirely in cash or fixed deposits loses ground to inflation every year. Know which you're building.

• Revisit the plan only when something structural changes. Set clear triggers in advance: a major change in healthcare costs, a permanent shift in income expectations, or a significant change in household circumstances. Daily market moves and geopolitical headlines are noise by definition; respond to structure, not sentiment.

Your Turn:
The experts describe sequence of returns risk as the biggest threat for pre-retirees. Before today, was this on your radar as a specific, named risk – or did it blend into general "market risk" in your thinking?
The three-bucket framework separates money by time horizon. Do you currently think about your portfolio this way, or do you have a single undifferentiated pool that serves all purposes?
Brandon Ho says to revisit the plan only when something structural shifts. What would need to happen for you to consider that a genuine structural shift – and when did you last actually review your plan against that standard?

👉 Hit reply and share your thoughts – your answers could inspire fellow readers in future issues.

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