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Investment options to consider when you’re at or near retirement

​To say the markets have been on a roller coaster as of late is an understatement. The COVID-19 pandemic sent the investment world into a tailspin and made an already difficult time even tougher for those who have watched their investments fall. 

To maximize the probability of a financially secure retirement, however, means that most of us do need to invest our CSS funds in the roller coaster that is the global financial markets throughout our careers. Why? Simply put, there is no “free lunch.” There are no low-risk investments that pay high returns. In order to accumulate enough pension funds to live comfortably in retirement, and to ensure those funds generate enough income during your retirement, you must take on some degree of risk – and the market’s ups and downs are part and parcel of this equation. 

As a member of the CSS Pension Plan, you have choices when it comes to investing your pension contributions between the Plan’s four investment funds. 

Each investment fund has different levels of risk and expected return. This gives you the opportunity to invest according to your own risk tolerance; however, when the markets are down, it can be difficult to know what to do. Should you switch to one of the Plan’s lower-risk investment funds or stay the course? An important factor that can help you answer this question is your career stage.


When we’re in the early and middle parts of our careers, with a significant number of years ahead of us before reaching retirement, substantial market declines like the recent one, while undoubtedly scary, should not cause us to panic. The good news is that you have time on your side and are therefore more likely to recoup investment losses over the duration of your career. In fact, a downturn may benefit you over the long-term, as you will continue to invest into what will likely be, if history repeats, an increasing market over time. To keep with our roller coaster analogy, now is simply the time to close your eyes and hang on (and scream if you like).


Cheeky analogies aside, for those looking to retire in the next few years, or who have recently retired, the market conditions we are experiencing now are far more concerning. In particular, there are two sub-groups in the late-career / recent retiree member demographic that may be struggling the most:

  1. Those late-career / recent retirees who do not have a retirement income plan yet established and have not made any portfolio adjustments to reduce their exposure to equity markets; and
  2. Those who significantly reduced their equity holdings just before, or at the start of, the pandemic-induced market downturn.  
The first group above may be asking what do I do now? Do I de-risk my portfolio now? Do I create a spending reserve now? While the second group’s questions will likely be more along the lines of can I afford to stay out of the market? How and when do I get back into the market? What do I do now? There are options for near and recent retirees to consider to address these questions. 


Create a retirement plan

A big part of successfully navigating a significant downturn in markets just before retirement is having a plan that is designed for such a possibility and sticking to the plan. A retirement plan helps keep the long-term, big-picture in mind and helps you avoid making knee-jerk decisions when emotions run high.

Our member profile- Ron Gartner provides an example of how having a plan, and sticking to it, can help you maintain the discipline required to navigate through a significant market downturn. Our focus in this article is to look at things from the perspective of the two groups identified above.

For both groups of members mentioned above, it is not too late to create a retirement plan and, in fact, it is recommended that they do so. A very good place to start is to make use of the Basic Retirement Planner tool available on the CSS website (myCSSPEN login required) to determine what impact the recent market downturn has had on your ability to achieve your retirement goals and retirement income expectations. The planner tool will help you understand the interaction of the assets you have at your disposal to generate retirement income, your investment horizon or timeline while you are retired, and whether your assets will generate the required retirement income.

Consider your investment horizon

For the group that did not make any changes to their portfolio prior to the market downturn, the output from the planner tool will help you understand whether you need to consider working longer to allow your portfolio time to recover as well as provide time for you to contribute more. You may find that making additional voluntary contributions will help you rebuild the required assets to generate the income you need in retirement. Or, assuming you do not want to alter your planned retirement date or make additional contributions, you may determine that your retirement spending expectations are not realistic and you’ll need to adjust your expectations. 

Balance risk and asset growth needs

For the group that eliminated or significantly reduced their equity exposure, just before or at the start of the downturn, the Basic Retirement Planner tool will help them to understand whether their portfolio will generate enough income for them in retirement without having exposure to equities. These members need to realize that they will likely need to support their retirement spending for another 30 years or so and that an ultra-conservative portfolio (for example, a portfolio holding 100% CSS Money Market Fund) will not provide the growth required to meet the member’s retirement spending expectations. 

The value of a spending reserve

Holding one to three years of planned retirement spending in conservative assets (for example, the CSS Money Market Fund) is an excellent way to minimize the risk that you’ll have to sell or transfer out of equity investments during a market downturn. This practice allows you some breathing room to give your portfolio time to recover from a downturn while not impacting your access to retirement income. CSS generally recommends members who will be managing their own investments in retirement consider making a spending reserve a component of their retirement plan.

Consider other sources of retirement income

Keep in mind that you will likely have other sources of retirement income to consider in your retirement plan. For example, CPP and OAS. A valuable design element of our government pension programs is that we have flexibility on when we start them. But, that also means we have to do a bit of work to determine how we want to take advantage of that flexibility to suit our own individual needs. Factors like life expectancy, tax considerations, and how you anticipate spending your retirement funds at different stages of retirement all come into play; nonetheless, having flexibility on when to start government pension payments may provide needed flexibility in your retirement plan to adapt to the recent market downturn. For more information on when starting CPP/OAS might be right for you, review our article “When is the best time to start CPP payments?” 

Consider your own unique goals and circumstances

Keep in mind that every member’s circumstances are unique, so it is not possible to suggest or recommend a standard asset allocation or financial plan for all members to follow. To help highlight investment considerations important to each stage of a typical member’s career and life, we have numerous resources available on our website, including a series of investor stories. We encourage you to take a look at the investor profiles for your age group as there will be considerations in those profiles that are likely relevant to your own circumstance that should be considered in your own retirement plan.


There is no doubt that the recent market downturn has been unnerving for members, whether they have a well-formulated retirement plan or not. In particular, members that are close to retirement or who have recently retired may be feeling particularly anxious about what should otherwise be an exciting time in their lives, the transition to retirement. 

It is important to recognize that while no one can guarantee that this downturn will be similar to past downturns, all market downturns in the past have recovered (see our article “Recent market madness: Have we been here before?” for more information on past market downturn activity). It is also important to recognize that members can take steps to help themselves ride out the current market conditions and prepare for their retirement years, even if their portfolio has been negatively impacted.

We recommend you consult with a qualified financial advisor at your credit union or bank, or contact us to speak to a CSS Pension Plan Consultant (PPC) to assist you in creating your retirement plan (if you don’t already have one), and to review, with you, your investments to determine what strategies you might consider to adapt your portfolio to recent market events and position it to support your retirement goals.

Article from the spring 2020 issue of TimeWise.