How should portfolio risk change as retirement approaches?

Detailed Explanation

The runway shortens, so the tolerance for a deep decline shortens with it. Early on, a bad year is recoverable because there are decades of contributions ahead. Close to retirement, the same decline hits a larger balance with less time and no new contributions to average into it — the same percentage loss is a much bigger problem. Most plans respond by reducing volatility gradually as milestones approach, and by reviewing insurance cover at the same time. The adjustment should be scheduled and deliberate rather than triggered by a market you have just watched fall.