Apr 14, 2026
Speed is the name of the game in early retirement, but according to one couple, there’s more to it than that.
Business Insider reported that Kristy Shen and Bryce Leung set a goal to sunset early in 2012. (1) They discovered the Financial Independence, Retire Early (FIRE) movement (2), which has the goal of retiring before the expected age of 65. The couple came across a strategy that claimed this was possible by investing in index funds.
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Initially skeptical, they ran the numbers and realized they could retire on a modest $1,000,000 portfolio. By 2015, they had reached their goal. They quit their engineering jobs and began traveling the world, living off their investments. They earned some income from their two bestselling books, but say it’s not enough to sustain their lifestyle.
The couple highlighted an investment strategy broken into two phases: accumulation and income. In the accumulation phase, you invest aggressively in equities. This aligns with Financial Industry Regulatory Authority (FINRA) guidance, which suggests financial advisors recommend stocks and mutual funds to those who prioritize growth over stability. (3)
The second phase, income, begins once you reach financial independence and stop working. The goal is to switch from a growth-focused portfolio to one that can weather economic storms, such as bonds and dividend stocks. It’s counterintuitive, but it can mean the difference between staying retired and returning to work.
Switching from growth to income
The counterintuitive truth is that reducing growth can benefit retirees over the long-term.
Stocks, bonds and other assets perform differently depending on economic conditions. That’s why investment firm Vanguard recommends periodically rebalancing your retirement portfolio. (4) For example, during a market downturn, you might shift from a 60/40 position of stocks and bonds to 40/60. Moving money out of volatile stocks can reduce your exposure to risk.
“Volatility is unnerving for any investor and can be especially damaging early in retirement,” says Nevenka Vrdoljak, a senior investment analyst at Merrill. (5) A sudden downturn could force you to withdraw stocks at low prices, derailing an otherwise promising retirement plan.
Downturns are more common than you might think. Morningstar estimates the stock market crashes about once a decade, on average. The worst crash was the Great Depression, in which the stock market lost 79% of its value. Even a 10% drop is enough to rattle a retirement portfolio. (6)
For retirees, the question isn’t whether a crash will happen. It’s how many.
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The U.S. Department of Labor says the average American spends 20 years in retirement. (7) That’s roughly two major market downturns to ride out.
Shen and Leung retired in their 30s, giving them a much longer runway than your typical retiree. Turning investments into steady income will be key to making their money last through recessions, pandemics and market panics.
Many advisors suggest diversification as a way to protect your portfolio. Instead of relying solely on growth stocks and index funds, consider investments that generate income.
“Instead of relying on capital gains and just looking at the total value of your portfolio, what becomes really, really important is how much dividends and interest and other types of income your portfolio is paying,” Leung says.
Income-generating assets like bonds and dividend stocks give retirees the flexibility to cover the bills without selling their underlying investments.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Business Insider (1); Vanguard (2); FINRA (3); Vanguard (4); Merrill (5); Morningstar (6); U.S. Department of Labor (7)
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Cole Tretheway has been covering money for four years. He started as an intern at The Motley Fool Money, covering best-of credit cards, savings accounts and financial products. He's since expanded into holistic personal finance, including the psychology of money.
