Retired, or nearing retirement? The DeepSeek scare should be a wake-up call.

“It’s common to meet people who set an aggressive investment strategy early in their careers, feeling comfortable with high risk because they had time on their side,” says Brenna Baucum, a financial planner in Salem, Ore. “Fast-forward 30 years, and as retirement approaches, they’re often surprised to find their portfolio still heavily exposed to equities. This is why I emphasize the importance of regularly reviewing and staying in touch with how your portfolio is invested as life circumstances evolve.”

“Think back to 2007 and 2008, when there were people about to retire or early into their retirement yet invested highly in equities,” says George R. Gagliardi, a financial adviser in Lexington, Mass. “The S&P 500 fell over 50%. Many who were getting ready to retire had to postpone their retirement date. Worse, many bailed on stocks right at the beginning of an amazing bull run in equities, taking the losses and missing out on the future gains.”

The S&P 500 also fell by 50% during the longer bear market that began in early 2000 and didn’t really end until the spring of 2003.

In both cases, the market recovered, and then some, in time. Even if you invested in the S&P 500 at the 2000 peak and held on, today you’d be up nearly 600%. If you’d invested at the peak in 2007, you’d have made nearly 500%.

But that was little consolation for those who needed their money at the time. Some had to liquidate part of their portfolio each year at depressed levels just to live. Others, watching their fortune fall, panicked and cashed out everything.

Financial advisers warn retirees and near-retirees about something called “sequence of returns” risk. If you need your portfolio to last for the 30 or 40 years of your retirement, what matters isn’t just the average return that it earns per year over that period, but when those returns come.

A bear market, when stocks plunge, early in your retirement can be a disaster. You’ll be liquidating a disproportionate percentage of your portfolio at depressed prices. By the time the stock market recovers, your remaining portfolio will be too small to make up the difference.

“Two investors may enjoy the same average return on the investments in their portfolio, but may still experience very different outcomes on account of the sequence in which these returns arrive,” writes Wade Pfau, professor at the American College for Financial Services and a leading expert on retirement finance. “Retirees are very vulnerable to what happens just after they retire.”

A recent article in the Journal of Financial Planning found that the best strategy, contrary to much conventional wisdom, may be to have a low allocation to stocks early in retirement and then increase your exposure as you age.

“My recommendations to clients approaching or already in the early years of retirement is to have at least five years’ worth of needed funds for retirement invested in very-low-volatility assets, usually high-quality short-term bonds or similar, and to continually replenish that reserve,” says Gagliardi. “It won’t earn much — though today, yields of 4% to 5% are achievable, but that may change — but at least they won’t need to sell beaten-down equities for needed funds if or when a correction occurs.”

Advisers add that your own financial position is a key factor. How much are you going to need your portfolio for income in retirement?

“Context matters,” says Baucum. “For example, if someone has steady income from Social Security and a pension that fully covers their core needs, they may have more capacity to tolerate market fluctuations. But for someone with less predictable income — like rental properties or consulting work — their portfolio should be designed to better manage that uncertainty.”

Retirees and near-retirees also need to consider their retirement goals. “Are they focused on enjoying travel and experiences, or do they want to leave a legacy or gift wealth to family? These factors, in combination with age and life stage, should shape the portfolio’s overall allocation.”

Monday’s DeepSeek turmoil may be a tempest in a teacup and may quickly pass. But it’s a good reminder that stock markets don’t just go up, and how you’re invested should be tailored to your needs. And if you’re near retirement, or you’re actually retired, you may want to balance “FOMO,” or “fear of missing out,” with “FOROM” — “fear of running out of money.”