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For most of your investing life, you’ve probably been encouraged to build a portfolio that balances risk and return — achieving the highest returns possible based on your personal tolerance for risk.

For most people, that means living with a certain amount of volatility in exchange for growing a comfortable nest egg for their retirement years.

You can lose money taking on too much risk, of course, but you won’t gain much ground being too risk-averse. So a larger investment in the stock market (60%, 70% or more) would be a must for those looking to help grow their wealth over the long term.

In retirement, though, things are different and a shift in thinking is required.

The goal for most people should change as retirement nears — from growing their nest egg to helping to protect their savings and ensuring the money they’ve accumulated can provide them with enough income to last 20 to 30 years or more.

That means a shift in mindset and a transition in strategies.

The problem is, the financial industry has done such a good job of pushing accumulation at (almost) any cost, it can be tough for some to switch their focus to the next stages of investing: preservation and distribution.

Don’t let this happen to you

Recently, for example, we put together a retirement plan for a potential client who had saved a hefty chunk of money — more than $3 million. We included an income plan — using a bucketing strategy — that laid out where he would get his money in retirement.

With bucketing, we typically look at three time frames, which could be labeled “now,” “soon” and “later.”

The “now” bucket is designed to cover living expenses and larger emergency expenses in the first years of retirement. The “soon” bucket holds money you may need to access a few years down the road.

And both buckets are built to withstand a market downturn early in retirement — a time when “sequence of returns risk” can devastate a portfolio.

In this case, the first bucket, the “now” bucket, was set up with cash equivalents and fixed-income investments. The second, “soon,” bucket included equities (about 50%). The “later” bucket had a higher percentage of equities, designed for long-term growth and legacy planning.

When presented with the potential plan, the client felt that we had put too much into fixed income, especially at the beginning of the plan. He thought more growth opportunity was needed and wanted to take more risk.

So, rather than focusing on how to generate income from the portfolio, the client was still focusing on trying to achieve potential higher rates of return.

We had covered the biggest concerns the client had come to us with: How long the money would last, and where exactly to pull income from. But in the end, the client focused more on maximizing the rate of return.

Those are two different goals.

Time to change perspective

I can’t blame the investor, who had been trained for 30 years to think about risk and reward, account values and returns.

But I do hope that, as an industry, we can help people understand that cash and fixed-income investments can play a critical role in weathering economic storms and can help protect what individuals have in retirement.

Each investment has valuable features people can use to their advantage. But needs are different in retirement, and a person’s plan should reflect that.

Even if you can handle a more aggressive investing strategy, why risk it? In retirement, it’s important to think of your savings as income rather than a lump sum.

It’s not all about achieving maximum return on investment anymore; it’s about how you can get the maximum return from your portfolio and into your pocket.

Instead of sticking with a collection of random investments or going with a cookie-cutter asset allocation, talk with your adviser about ways to help build a strategic plan for how you’re going to distribute your assets to yourself.

Kim Franke-Folstad contributed to this article. Jonathan Imber, an investment adviser and Registered Financial Consultant, is vice president of Imber Wealth Advisors Inc. This article was written by and presents the views of the author, not the Kiplinger editorial staff. Check adviser records with the SEC or with FINRA.

© 2019 The Kiplinger Washington Editors, Inc. Distributed by Tribune Content Agency, LLC.