Iran, Oil, and Your Retirement Plan: What History Tells Us—and What Actually Matters for Your Financial Future

If you’re retired or approaching retirement in the next few years, the headlines coming out of the Middle East are hard to ignore. U.S. and Israeli military strikes on Iran, retaliatory missile attacks across the Gulf, oil prices surging past $100 a barrel for the first time since 2022, and major stock indexes dropping sharply—it’s the kind of news cycle that makes anyone with a retirement portfolio pay attention.

That’s completely natural. When the world feels uncertain, it’s reasonable to wonder: Should I be doing something different with my money?

The short answer, for most retirees and near-retirees with a sound financial plan, is: probably not. But the longer answer is more nuanced—and more useful. In this article, we’ll walk through what history tells us about markets during wartime, why your financial plan matters more than the headlines, and the specific planning steps that actually protect your retirement income during periods of geopolitical risk.

What’s Happening Right Now—and Why Markets Are Reacting

On February 28, 2026, the United States and Israel launched joint military strikes against Iran, including strikes on leadership and military infrastructure. Iran retaliated with missile and drone attacks on U.S. bases and Gulf state facilities. The conflict has disrupted oil shipping through the Strait of Hormuz—a chokepoint for roughly 20% of the world’s oil supply—and sent energy prices sharply higher.

Here’s a snapshot of the market impact in the first week and a half of the conflict:

• Oil prices surged from around $70 to above $100 per barrel, with intraday spikes near $120.
• The Dow Jones Industrial Average fell over 3% in a single week. The S&P 500 dropped about 2% and slipped below its 100-day moving average.
• The CBOE Volatility Index (VIX) jumped above 30 for the first time since the tariff-related selloff in April 2025.
• Gold, the U.S. dollar, and Treasuries all saw “safe haven” buying—a classic sign of investor anxiety.
• International markets were hit harder, with Japan’s Nikkei falling more than 5% and Germany’s DAX dropping nearly 3.5%.

These are real moves. They’re also exactly the kind of short-term disruption that the financial media amplifies—and that can lead to costly decisions if you react emotionally.

What History Tells Us About Wars and the Stock Market

If this feels unprecedented, it’s worth stepping back and looking at the data. Markets have lived through wars before—many of them far larger and more disruptive than what we’re seeing today.

The table below tracks the S&P 500’s price performance after the start of six major U.S. military conflicts going back to World War II:

Source: Standard & Poor’s. S&P 500 price returns. Past performance is not a guarantee of future results.

The pattern is striking. In five out of six cases, the S&P 500 was higher five years after the conflict began. In five out of six cases, it was significantly higher after ten years. The lone exception—Vietnam—coincided with a period of severe inflation and structural economic challenges that went well beyond the war itself.

Why Do Markets Tend to Recover?

Geopolitical events rarely change the long-term trajectory of markets unless they trigger one of three outcomes: a prolonged disruption to global energy supply, a pronounced tightening in financial conditions, or a broad economic downturn. Absent those developments, markets tend to recalibrate relatively quickly as uncertainty fades and economic fundamentals reassert themselves.

As one major Wall Street research team noted in the early days of the current conflict, strong market reactions to geopolitical events are generally short-lived. Looking across major geopolitical events going back decades, U.S. stocks have delivered positive average returns six and twelve months later.

That doesn’t mean this time will follow the same playbook. Every conflict is different. But the historical pattern is clear: the biggest risk for most long-term investors isn’t the crisis itself—it’s the decisions they make in response to it.

Why Your Financial Plan Matters More Than the Headlines

Here’s the core question most retirees and near-retirees are really asking right now: Will my money last if things get worse?

That’s a planning question—not a market-timing question. And the answer depends far more on the structure of your financial plan than on what oil prices do this week.

The Real Risk for Retirees: Sequence of Returns

For retirees who are drawing income from their portfolio, the danger isn’t market volatility by itself. It’s sequence of returns risk—the possibility that a sharp decline early in retirement, combined with ongoing withdrawals, permanently reduces your portfolio’s ability to recover.

This is why having a plan that separates your short-term spending needs from your long-term growth assets is so critical. If you have two to five years of anticipated portfolio withdrawals set aside in cash, money market funds, or short-term bonds, a market downturn doesn’t force you to sell stocks at the worst possible time. You can draw from your safe reserves while giving your equity holdings time to recover.

If you don’t have that kind of structure in place, this is a wake-up call—not to panic, but to build one.

For Newly Retired or Recently Retired: This Is What Your Plan Was Built For

If you’ve recently retired—or retired within the last few years—this kind of market environment can feel especially personal. You’ve worked decades to build your nest egg, and watching it fluctuate when you’re no longer adding to it is a different experience than it was during your working years.

But here’s the truth: a well-built retirement income plan already accounts for periods like this. It doesn’t assume smooth sailing. It’s designed to absorb market shocks, maintain your cash flow, and keep you on track. The question isn’t whether volatility will happen—it’s whether your plan has the structure to handle it when it does. If it does, your job right now is to trust the process and lean on the planning, not the headlines.

How We Navigate Uncertainty: A Retirement “GPS” Instead of a Static Map

At our firm, when clients call with questions about the Iran conflict, we don’t start with the markets. We start with their plan. And the way we build and monitor that plan is fundamentally different from how most advisors operate.

Why Traditional Planning Falls Short in Moments Like This

Most retirement planning software gives you a single number: a “probability of success” score. You might hear something like, “You have an 87% chance of not running out of money.” That sounds reassuring—until the market drops 5% in a week and you have no idea whether that number just changed, or what you should actually do about it.

That’s because a probability of success score is a static snapshot. It tells you where you stood at a single moment in time, under a fixed set of assumptions. It doesn’t adapt. It doesn’t tell you when to act, or how much to adjust. And in a fast-moving environment like the one we’re in now, a static snapshot can create more anxiety than clarity.

Our Approach: The Retirement “GPS”

We use a planning methodology that works more like a GPS navigation system than a paper map. Just as a GPS reroutes you when you hit traffic or construction, our planning software continuously recalibrates each client’s plan based on their actual resources, current market conditions, and any changes in their life. The goal isn’t to predict the future—it’s to find the optimal path forward from wherever you are right now.

In practice, this means we don’t rely on abstract percentages. Instead, we translate risk into something far more actionable: dollar-based guardrails that tell our clients exactly what their safe spending range looks like at any given moment.

How Risk-Based Guardrails Work

Think of guardrails as the boundaries of a highway—they define the safe lane your spending can travel in. Our planning calculates two key thresholds for every client:

• The Lower Guardrail (Safety Brake): This is the portfolio value at which we’d recommend tapping the brakes on spending. If the market drops and the portfolio hits this threshold, we know exactly when to suggest a temporary reduction—like delaying a large discretionary purchase or trimming monthly expenses by a specific dollar amount. There’s no guesswork. The plan tells us the number.
• The Upper Guardrail (Prosperity Signal): This is the portfolio value at which the client gets a green light to increase spending. If markets perform well and the portfolio grows past this threshold, we can confidently say: “You can afford to spend more.” Many retirees underestimate this risk—the risk of underspending and leaving money on the table that could have enhanced their quality of life.

These guardrails aren’t based on a simple withdrawal percentage. They factor in the full complexity of each client’s plan: sequence of returns risk, inflation, mortality assumptions, Social Security timing, pension income, legacy goals, and any anticipated changes in cash flow like the sale of a home or a change in health care costs.

Why This Matters Right Now

Here’s why this approach is so powerful during a week like this one. When a client calls and says, “Should I be worried about my retirement?” we don’t respond with vague reassurance. We can pull up their plan, show them exactly where their portfolio sits relative to their guardrails, and give them a concrete answer:

• “Your portfolio is still well within your safe spending lane. No adjustments needed.”
• “We’re approaching the lower guardrail. Let’s talk about a modest, temporary spending adjustment—here’s exactly what that would look like.”
• “Actually, even with the recent dip, your plan shows you have room to maintain your current spending—or even do a Roth conversion at lower values.”

That’s the difference between a plan that gives you a number once a year and one that gives you a clear, dollar-based answer any time the world throws a curveball.

The Older Approach—and Why We Moved Beyond It

For context, the most widely known guardrail strategy in retirement planning is the Guyton-Klinger method, developed in 2006. It worked by setting a fixed initial withdrawal rate and then adjusting only if spending drifted too far from that starting percentage.

The problem? Most retirees don’t spend in neat, constant percentages. Spending patterns change over time—higher in the early “go-go” years, lower in the “slow-go” years, and often higher again in late retirement due to health care costs. When tested against actual historical market data, older distribution-rate-driven approaches have significant shortcomings, particularly during major market downturns.

The risk-based guardrail approach we use solves this by dynamically adjusting to each client’s actual spending shape, risk profile, and current market reality. It’s analytically superior to older methods, but it requires specialized planning software to calculate, test, and monitor at scale—which is why most advisors haven’t adopted it yet. [link to our article on building a retirement income plan]

Planning Opportunities in the Current Environment

Even within a guardrails framework, market volatility can create unexpected planning opportunities worth evaluating:

• Tax-loss harvesting: If taxable account positions have dropped below your cost basis, you may be able to realize losses that offset gains elsewhere—reducing your tax bill. [link to our article on tax-loss harvesting for retirees]
• Roth conversions: A market dip can be a good time to convert traditional IRA assets to a Roth at a lower tax cost, especially if your guardrails show you’re well within your safe spending lane and can absorb the tax hit.
• Rebalancing: If equities have declined and bonds have held steady or risen, rebalancing back to your target allocation means buying equities at lower prices—exactly the kind of disciplined, systematic approach that rewards patient investors over time.

The Signal vs. the Noise

Not every geopolitical event changes the economic outlook. Most don’t. What matters for markets over the long run is corporate earnings, economic growth, inflation trends, and central bank policy. Those fundamentals haven’t changed because of the Iran conflict—at least not yet.

If the conflict escalates into a prolonged disruption of global energy supply, that’s a different scenario—and one we’re monitoring closely. Our guardrails would reflect that shift in real time. But right now, making permanent portfolio decisions based on temporary uncertainty is one of the most reliable ways to undermine a retirement plan.

What We Tell Our Clients During Times Like These

When a client calls us during a market disruption—whether it’s driven by a geopolitical event, a pandemic, or a tariff shock—we don’t start with the news. We pull up their plan and walk through a straightforward set of checkpoints:

1. Where are you relative to your guardrails? Is your portfolio still within the safe spending lane, approaching the lower guardrail, or have you actually hit it?
2. Has anything changed in your life? New expenses, health changes, or a shift in your plans?
3. Are your liquidity reserves intact? Can you cover your near-term spending without selling investments at a loss?
4. Are there planning moves to consider? Tax-loss harvesting, Roth conversions at lower portfolio values, or rebalancing opportunities the dip has created?

Nine times out of ten, the answer is: Your plan is working. You’re well within your guardrails. Stay the course. And that’s not complacency—it’s the result of having built a plan that was designed to withstand exactly this kind of environment, with a live navigation system that proves it in real time.

A Quick Example

Consider a retired couple in Maryland, both in their mid-60s, drawing about $6,000 per month from their portfolio to supplement Social Security and a small federal pension. When the Iran conflict started, their equity allocation dropped about 5% in a week. Naturally, they called us.

We pulled up their plan and showed them where they stood: their portfolio was still comfortably above their lower guardrail—nowhere near the “safety brake” threshold. No spending adjustments were needed. We actually used the dip as an opportunity to do a small Roth conversion at lower account values, which will save them tax dollars down the road.

No panic. No rushed trades. Just a GPS-style plan doing what it was designed to do—recalibrating in real time and showing them exactly where they stood.

That’s what retirement planning looks like in practice—not avoiding risk entirely, but managing it with structure, clear thresholds, and a system that adapts to the world as it actually unfolds.

Key Takeaways

• History shows that markets typically recover from geopolitical events. In five of the last six major U.S. military conflicts, the S&P 500 was higher five years later.
• The biggest risk isn’t the crisis—it’s reacting emotionally. Selling into a downturn locks in losses and can permanently damage a retirement portfolio.
• A GPS-style plan beats a static snapshot. Dollar-based guardrails that adapt to market conditions give you a clear answer about your spending safety—not just a probability score from last year’s review.
• Volatility can create planning opportunities. Tax-loss harvesting, Roth conversions, and rebalancing are all worth evaluating during market dips.
• A sound plan is built for times like these. The value of financial planning isn’t tested in calm markets—it’s proven in uncertain ones.

What You Can Do Right Now

If you’re feeling uncertain about your retirement plan in light of recent events, here are three steps you can take today:

• Check your liquidity. Add up how many months of essential expenses you could cover from cash, savings, and short-term bonds without selling any stock positions.
• Review your withdrawal plan. If you’re taking income from your portfolio, know exactly where that money is coming from and whether you have flexibility.
• Talk to your advisor. If you don’t have a clear, documented plan for how your portfolio supports your retirement income through periods of volatility—this is the time to build one.

Schedule a Complimentary Introductory Call

If you’re a Maryland retiree or pre-retiree wondering whether your portfolio and income plan are positioned for today’s environment, we’re happy to talk. Our introductory call is free, takes about 30 minutes, and gives you a clear picture of where you stand. Schedule Your Call

Not ready to talk yet? Download our free Retirement Income Stress-Test Checklists—evaluate whether your plan is built to handle uncertainty. Download the Checklist