For Edward Jones financial advisors, the recent market volatility has provided more opportunities to communicate appropriate courses of action to clients, including retirees.

“Retirees may be concerned about ensuring they are properly positioned to weather a down market,” Caleb Stapp says. “But they actually may have more options for managing their income than they might have thought.”

Retirees might benefit from these moves:

· Spend from their cash. During a downturn, emotions may lead retirees to consider selling stocks due to concerns about the market environment. But in a diversified portfolio, stocks are designed to provide growth for their income needs years in the future. Near-term income needs should be addressed by cash and short-term fixed income portion of the portfolio, designed to provide for their needs today, as well as allowing time for their stocks to recover.

· Review spending. During retirement, some expenses, such as commuting and other costs associated with work, will go down, but others – particularly health care – will go up. But reviewing expenses and potentially focusing on necessary expenses while reducing discretionary expenses can be very beneficial during down markets. Establishing a budget and sticking to it may also reveal flexibility they might not realize they have.

· Understand reliance rate. Retirees should review their “reliance rate,” which, as its name suggests, tells how much they rely on their investment portfolio – rather than other sources, such as Social Security or a pension – to meet income needs during retirement. As a general rule, the higher the reliance rate, the more sensitive an individual may be to fluctuations in investment prices. Furthermore, investors with a high reliance rate may be more likely to make emotional decisions when the market declines. To reduce the reliance rate, or at least modify the risk attached to it, retirees may want to take steps such as delaying Social Security to ensure bigger monthly payments, or finding other sources of reliable income, such as annuities with lifetime income benefits, which can provide a lifetime income stream regardless of market conditions.

· Manage withdrawals carefully. Retirees need to be careful not to withdraw too much money from their portfolio early on in their retirement. By taking out too much, too soon, they run the risk of outliving their resources. Consequently, it’s important to establish a proper withdrawal rate, the percentage of a portfolio¿s value needed for one year’s worth of retirement expenses. Retirees may be better off adopting a more conservative rate at the beginning of their retirement. This strategy could provide some “downside protection” for those years in which the market has dropped significantly.

· Review goals and risk tolerance. Overall, if retirees find themselves greatly worried about having to sell investments when the price is down, they may need to review their goals and risk tolerance. If their projected retirement lifestyle is too costly or their risk tolerance is lower than they had initially thought, they may need to revisit their financial strategy. That said, while it is normal to feel concerned when markets decline, it is important to ensure their strategy is designed to provide for their needs over time. Ultimately, retirees should pause and review their goals before making changes.

“Ultimately, if retirees have prepared their portfolios for all economic environments and they’re careful about managing their withdrawals, they shouldn’t have major worries when the markets go through periods of volatility,” Stapp says. “And it helps if they can focus on what they can control, which includes their goals, their portfolio’s diversification, their spending strategy and, ultimately, their emotions. In the long run, it’s the actions they take – not what happens in the market – that can help them fully enjoy their retirement years.”